A human rights lawyer says the case for compensation is strong for those who were held in jail too long as a result of Corrections misinterpreting the law.
Offenders could get about $7500 for each month wrongly spent behind bars, based on a past case.
Corrections will release 21 prisoners this week, and says about 500 current inmates could have their jail terms slashed. That number does not include former prisoners.
Human rights lawyer Dr Tony Ellis told the Weekend Herald he believed compensation for wrongful imprisonment was certainly on the cards after Thursday's Supreme Court ruling.
"I'm quite sure that some of them would insist upon bringing compensation claims, if the department didn't just pay out - which would probably be the prudent thing to do."
But after a briefing yesterday Corrections Minister Judith Collins said the chances of taxpayer money being paid out were "remote".
"I think if I was any of these offenders I would not be going out to buy a new car based on what I think I might get," she said.
The incorrect interpretation of the law dates back the 2002 Parole Act - meaning hundreds of people could have spent too long inside.
Hamilton lawyer Roger Laybourn said yesterday he had received calls from former prisoners who thought they could be affected.
"I wouldn't be surprised if this is happening up and down the country - that lawyers like myself will have ex-clients ringing and saying, 'I've long had a beef with the prison about my release date'."
The Supreme Court ruling could create "very perverse" outcomes, Collins said - including that prisoners could offend while in jail on remand without any extra time being added to a sentence.
That meant a law change was possible.
Collins strongly defended Corrections, saying the department had done nothing wrong and had acted in accordance with how the Court of Appeal ruled the law should be interpreted on four occasions.
Time held in detention before a person is sentenced is treated by the law as time already served when release dates and parole are determined.
The Supreme Court has ruled that time in detention starts from the point of arrest - even if other charges are later laid.
Corrections has instead been working it out on a charge-by-charge basis.
This was done in the case of Michael Marino, who took the appeal to the Supreme Court. Marino was taken into custody in February last year on family violence charges.
In March and June further charges were laid of attempting to pervert the course of justice as a result of telephone calls he made from prison.
Marino pleaded guilty to all charges and was jailed for 22 months, less any time already held in detention.
Corrections worked out he would get out of jail in May this year - calculating time in detention from when the second perverting the course of justice charge was laid.
That was June 19 last year - meaning he didn't get credit for the period from February to June when he was held on family violence charges.
Marino's appeals were unsuccessful in the High Court and Court of Appeal, but the Supreme Court granted him leave to appeal.
That mattered to another offender, Edward Thomas Booth who was also affected by Corrections' approach to calculating detention.
Marino is no longer in custody, but the ruling means Booth no longer needs to pursue his appeal and will have his eligibility for parole brought forward by about 10 months.
His lawyer Andrew Bailey said that would probably be some time next year. His client was "very happy" with the ruling.
Collins said if the Parole Act was changed it could be done so in such a way as to rule out compensation. However, she said under the Prisoners' and Victims' Claims Act any compensation would likely be considered a windfall and be paid to victims, and the Limitation Act could also limit claims.
Corrections had also been acting in accordance with the law as determined by the Court of Appeal, Collins said.