The review into the principle of doli incapax in New South Wales, led by the State Parole Authority's Geoffrey Bellew SC and former NSW Police Deputy Commissioner Jeffrey Loy, could have significant impacts on the state's juvenile justice system, a major out-of-home care provider has warned.

CASPA, a not-for-profit organisation, states it provides "compassionate, innovative, and trusted services to children, young people, families and people with disabilities".

"We believe everyone deserves the opportunity to have a meaningful and fulfilling life. CASPA offers a range of services including child and youth support, foster and kinship care, emergency support, disability support and family support," the group says.

Indigenous children are significantly over-represented in the NSW out of home care system and in the state's youth justice system.

On Monday, CASPA said "it could be assumed that the review's outcome will be 'tough on crime' ... considering the positions held" by Mr Bellew SC and Deputy Commissioner Loy

Doli incapax is, in CASPA's words, "the common law presumption that children aged 10 to 14 are not capable of understanding the difference between right and wrong", making it unethical to hold them criminally responsible.

Another interpretation of the phrase is that it is the presumption children aged 10 to 14 are not capable of determining when something is "seriously wrong".

CASPA warned that removal of this principle "will lead to younger children being prosecuted and incarcerated, which, considering the current state and effectiveness of the youth justice system, is concerning".

The group noted the recently released footage from the Reiby Youth Justice Centre, broadcast by the ABC, depicting the violent assault on a young person "is an example of what could await children if held criminally responsible".

The NSW Premier this year announced that more young people were in prison and being denied bail. Research indicates that exposure to criminal justice system increases the likelihood of reoffence.

CASPA chief executive Naarah Rodwell said the organisation works with children who have experienced complex trauma, family violence and neglect "far too young".

"Inevitably, many of these young people also come in contact with the criminal justice system," she said.

"Locking up children as young as 10 without consideration for how these environments magnify their childhood traumas and cause further harm does not address the issue's true cause. Instead, it continues the generational cycle of disadvantage and abuse."

Extensive research shows that while the adolescent brain is still developing, exposure to abuse and violence in youth justice facilities can profoundly impact a young person's future. Once caught within the system, there is an increased risk of reoffending.

"It is crucial to direct children and young people away from this trajectory and towards interventions that address their underlying vulnerabilities," CASPA said.

A recent NSW Bureau of Crime Statistics and Research (BOSCAR) report found the youth justice system has a significant overrepresentation of regional, remote children and Aboriginal children under 14, and that two-thirds of allegations were for non-violent crimes.

"It is not through further incarceration, but through providing trauma-informed care, mental health support, and educational opportunities, that young people, but especially those from these communities, can heal and build a better future," CASPA said.

The organisation noted that impact of removing the principle of doli incapax from NSW common law promises to be significant:

Young children will no longer be protected: Doli incapax is a safeguard that protects children aged 10 to 14. Its removal will mean younger children being incarcerated;

Burden of proof not required for incarceration: To incarcerate someone under 14 years of age, the prosecution must prove they can understand the wrongness of their actions. This would no longer be the case if doli incapax were removed;

Developmental considerations no longer needed: Recognising that children's brains are still developing, doli incapax ensures children are not unjustly punished for actions they may not fully comprehend;

Current facilities not appropriate for young children: If younger, more vulnerable children are being prosecuted and incarcerated, there are significant concerns about the current youth justice system and its appropriateness, effectiveness and safety; and

Impact on rehabilitation: Without the protection of doli incapax, there is a risk that children could be subjected to punitive measures rather than rehabilitative support. This would amplify existing trauma and increase the risk of reoffence, rather than addressing the root cause of their behaviour.

Ms Rodwell urged the NSW government to reevaluate this approach to youth justice.

"If the government is serious about preventing youth crime, the focus should be on the lived experience and the suffering of children and young people, rather than the misplaced notion that doli incapax is just a way for them to avoid consequences," she said.

"Locking up more children will not result in our communities being safer in the long term."

CASPA noted that doli incapax plays "a crucial role" in ensuring the legal system treats young children fairly and according to their developmental capacity; providing a "buffer" so children on the trajectory to a life of offending and reoffending can break the cycle and be diverted to rehabilitation and support services.

"Its potential removal could have far-reaching consequences for the futures of vulnerable young offenders," the organisation said.