Lawyers for the families have issued a pre-action letter to the DfE with details of the case, including of a teenage girl who attempted suicide in her school isolation room.
Law firm Simpson Millar has urged Education Secretary Damian Hinds to review the guidance, which specifies no upper limit for the practice, or face judicial review.
The guidance says that isolation booths must be used for a "limited time", but does not suggest what that may be.
The firm's education solicitor Dan Rosenberg, said schools were using isolation booths as a "dumping ground" for children, particularly those with SEN.
The letter follows a separate case against launched in December by the same firm, against Outwood Grange Academies Trust, on behalf of a boy who spent up to 35 days in isolation in one academic year. The case was later dropped when the trust said it would review its policy.
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