A NSW upper house inquiry into the over-representation of Indigenous people in NSW custody and reviews of Indigenous deaths in custody began on Monday.

At least 21 Indigenous people have died in NSW custody since 2008, including David Dungay Jr, who died at Sydney's Long Bay jail in December 2015.

Nationwide, more than 400 Aboriginal and Torres Strait Islander people have died in custody since the Royal Commission into Aboriginal Deaths in Custody was completed in 1991.

Custody statistics from June 2020 show more than a quarter of the NSW prison population is Indigenous. Indigenous people in the state were more than nine times more likely than non-Indigenous people to be imprisoned last year.

Tony McAvoy SC, the NSW Bar Association's First Nations Committee chair and Australia's first Senior Counsel, told the inquiry on Monday the coroner's court needed more funding to conduct its own inquiries into Indigenous deaths in custody.

This would occur instead of police or corrective services authorities gathering evidence.

"It is very difficult for the family of a deceased in an Aboriginal community to have any faith in an investigation of a death in custody by people who are answerable to the same minister or commissioner as the people who may be the subject of adverse comment," Mr McAvoy said.

"(Our) preference is that the coroner be resourced to do its job - that would mean resourcing the coroner's court with the investigative powers to do the investigation independently."

Mr McAvoy also recommended the installation of an Indigenous commissioner to sit alongside the coroner in order to instil confidence in bereaved families.

"I have had experience as a commissioner in the Land and Environment Court and I can say this much, I have no doubt my presence on the bench alongside the judge gave confidence to the Aboriginal Land Council parties that their submissions were being heard," he said.

"The coronial process is a difficult one for any family involved, particularly onerous for Aboriginal and Torres Strait Islanders because of the loss of a loved one in circumstances which are (linked to) the apparatus of the state."

Mr McAvoy said the NSW coroner should also be able to refer a case to the Director of Public Prosecutions, even if they don't yet believe a criminal conviction is possible.

The senior counsel's appearance at the inquiry comes as up to 500 Black Lives Matter demonstrators on Monday gathered in the rain in Sydney to protest deaths in custody and call for an independent body to investigate those deaths.

Representatives of Mr Dungay's family attended the rally at The Domain, as well as representatives of the families of Indigenous men Tane Chatfield and Nathan Reynolds, who died in custody in 2017 and 2018.

Australian Associated Press