The NSW Supreme Court in October awarded Raya Meredith $93,000 in damages after police forced her to remove her clothing and tampon during a drug search at the 2018 Splendour in the Grass festival in Byron Bay.
More than 3000 people could also receive compensation after registering to Ms Meredith's class action, run by law firm Slater and Gordon.
NSW Police have launched a challenge that will be heard in NSW Supreme Court on Thursday as they try to decrease the amount they may have to pay.
"It is not about drugs, it is not about protecting people from drugs, it is largely directed toward reducing the compensation which the court has ordered them to pay," Slater and Gordon practice group leader Rory Walsh told AAP.
"If the damages or compensation is reduced, that will, by implication, reduce their liability to other group members.
"The amounts of compensation on the individual level are moderately small and people are coming forward as a point of principle because they are offended at the misuse of police powers and they wanted to challenge it."
NSW Police Commissioner Mal Lanyon has defended the use of strip searches as a "valid tool" used by the force, but has previously issued an apology to Ms Meredith.
Police have also shifted their music festival strategy, with Superintendent Paul Dunstan telling a live music inquiry "the days of young people attending festivals, going through a gauntlet of police with drug dogs are behind us".
Mr Walsh welcomed the change and acknowledged NSW Police had a right to appeal the judgment, but urged their lawyers to constructively engage with Slater and Gordon to resolve the class action claims.
"Once that appeal process is complete and having now admitted that they have changed their approach, it's time to put this sorry history behind us," he said.
"We are acting on behalf of a very motivated group of people that have taken a stand at what they recognise was an abuse of police powers, that for many people was a very humiliating and unnecessary experience."
Redfern Legal Centre assistant principal solicitor Samantha Lee said it was time for the government to do the right thing and provide the compensation people deserved.
"The judgment made clear these powers must be used lawfully and only as a last resort," she said.
NSW Police have said it would be inappropriate to comment on the matter while it remains before the courts.
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