HUNDREDS of drivers may be able to seek compensation - and dozens of court cases are frozen - because SA's anti-hoon laws have been declared invalid.

Police will stop seeking court orders to sell or crush cars seized from the state's drivers after the Chief Justice ruled anti-hoon laws are invalid, as the Attorney-General John Rau considers an appeal.

On Tuesday, Chief Justice Chris Kourakis overturned an order for a Port Pirie man to forfeit his car in what has become a test case on the validity of the anti-hoon laws.

Police have used the anti-hoon laws to seize thousands of vehicles from drink-drivers over the past five years, earning millions of dollars in impound fees.

Hundreds of the cars have been sold or crushed after police have obtained forfeiture orders from magistrates.

South Australia Police Deputy Commissioner Grant Stephens today said police would not be making any further applications in court for forfeiture of vehicles following the judgement.

"This judgement does not impact in any way on the ability of the police to either impound or clamp a vehicle detected of specific offences detailed within the act, such as drink driving, excessive speed or misusing a motor vehicle," he said.

"Police will still enforce this part of the legislation in the same way as it has in the past.

"Forfeiture matters that are currently before the courts will be dealt with by adjournment until the Crown has examined the judgement and determined any need to appeal or provide legislative change."

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It is the second time that a Rann-era law has been deemed constitutionally "repugnant", following the failure of the anti-bikie legislation in 2010.

The Attorney-General is examining the decision by Chief Justice Kourakis and whether the legislation needs to be amended but lawyers urged him to scrap it and start afresh.

Defence counsel Ralph Bleechmore said he had acted for 90 people prosecuted under the state's anti-hoon laws.

"They weren't hoons but ordinary people suffering because of the seizure or destruction of their cars," Mr Bleechmore said.

"The so-called hoon Act is not about hoons at all - it's about generating publicity," he said.

The section of the law relating to impounding cars remains unaffected by His Honour's decision, which deals with the permanent forfeiture of vehicles.

Last year, Graeme Anthony Bell was ordered by a magistrate to forfeit his 1996 Commodore utility after being convicted for a third drink driving offence in a 10-year period.

Mr Bell argued the state's Clamping, Impounding and Forfeiture of Vehicles Act (2007) was invalid on constitutional grounds and challenged the decision in the Supreme Court of South Australia.

His lawyers argued that police did not have authority to punish offenders - and this was the responsibility of courts.

Chief Justice Kourakis yesterday ruled in favour of Mr Bell, saying the anti-hoon legislation took away the discretion of the courts and applied a double punishment to drink-drivers, who would lose their licences and be fined by magistrates.

He said State Parliament had handed police powers to punish people that it was unable to give.

In his judgement, Chief Justice Kourakis singled out the wording of the act as the problem.

He said it obliged the state's courts to order cars be forfeited, at the request of police prosecutors, and removed their discretion to refuse.

Chief Justice Kourakis said it was incompatible with High Court rulings that protected the independence of judges from political interests.

He said that forfeiture also acted as a double punishment, for offenders, on top of fines, convictions and disqualification.

"(Such an) order substantially increases the effective penalty above that fixed by the court... in the exercise of its sentencing discretion," he said.

"In imposing that additional penalty the courts act ministerially... as an instrument of the executive government to make an order which is dictated by the very terms of the prosecution's application.

"The forfeiture jurisdiction conferred on the courts of this State is incompatible with their constitutional status as courts which must be fit for investiture with federal judicial power."

Yesterday afternoon, Mr Rau said he was considering an appeal.

"The law, having now been interpreted in a certain way by the Chief Justice in this case presents us with a matter that we are going to have to consider carefully," Mr Rau said.

"Whatever goes on, this is not the whole of the legislation that has been attacked.

"It is a particular provision and many of the other provisions in the legislation dealing with the confiscation of vehicles will continue to operate."

Mr Rau said it was "really too early to say" if cars would have to be returned or compensation paid.

He said it was not yet possible to say how many people or vehicles had been affected under the disputed provision.

Determining the full impact of the ruling was likely to take several days.

"It is obviously from our policy position an unwelcome decision," he said.

"It may be, if this decision is to stand, that we have to look at whether the wording of that provision is adequate to achieve the policy outcome.

"I don't think there's any question about the policy outcome being one that has not been well-received by the community and quite effective as a deterrent."

Since the law allowing police to impound vehicles was introduced in 2009, more than 22,000 cars have been clamped or impounded.

In the 2011-2012 financial year, police clamped or impounded 7932 vehicles.

Of those vehicles, 178 were destroyed, 26 were sold at auction and six were publicly crushed.

The number of clamped or impounded vehicles rose from 7303 in the 2010-11 financial year.

In July, figures revealed police were impounding and clamping nearly 160 cars a week.

There were 8167 cars impounded or clamped in 2011 the first full calendar year after legislative changes broadened the list of offences for which cars could be seized.

That number included 7774 impounded and 393 clamped vehicles.

And that total compares with 5077 in the 2009-10 financial year, 3230 in 2008-09 and 1464 in 2006-07.

About one-third of impounded cars last year belonged to drivers who were reported for drink-driving offences.

Under current laws, it costs owners more than $900 to collect vehicles that have been impounded for a minimum of 28 days, up from $800 in 2011.

Yesterday, former attorney-general Michael Atkinson told 891 ABC Adelaide the anti-loon legislation was crafted during Chief Justice Kourakis' time as solicitor-general.

"He would not have been putting things together (but) he would have advised us from time-to-time, that was his role," he said.

"Now he has a different role, and that's fair enough."

Mr Atkinson defended the law, saying Chief Justice Kourakis' objection was based on "highly technical" legal concepts.

Opposition justice spokesman Stephen Wade said the Government needed to do more prep work before tabling bills.

"Once again, a Labor law is found to be trampling the rights of South Australians," he said.

"That's not uncommon with this Government.

"We will be calling on the Government to review all legislation and bills to make sure they stand up to scrutiny."

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* Courts must order forfeiture whenever a prosecutor asks.

* Courts have no discretion to say no, nor to vary the terms of the forfeit.

* Courts must order forfeiture even if it interferes with, or adds to, an offender's existing penalty.

* Forfeiture is often the most substantial part of the penalty.

* Prosecutors, not the courts, control how severe that punishment is because they get to pick which car is forfeited.

* An application for forfeiture amounts to the government ordering the court to do something.

* The applications force the court to act politically.

* Prosecutors can seek forfeiture retrospectively, forcing the courts to punish people months after their offence was committed.

Originally published as Hoon law loophole could be costly