Victims could be in for a windfall if prisoners successfully challenge claims of unlawful imprisonment as a result of a Supreme Court judgement released on Thursday.
The court ruled that the Corrections Department had failed to accurately factor in remand time when calculating the sentence end date of a prisoner, Michael Marino.
The department said then that because of the ruling about 500 of those currently in prison had release dates that would "likely" need to be changed.
And yesterday, the minister for the department, Judith Collins, said potentially thousands of prisoners could be affected going back to 2002.
Marino's lawyer, Douglas Ewen said the decision could open the door for large numbers of former prisoners seeking compensation.
Human rights lawyer Andrew Butler said if such a claim was successful in court, the prisoner might not obtain any of the money themselves.
He said victims now had first claim on such payments, as a result of the Prisoners' and Victims' Claims Act.
The legislation established a fund for victims as a result of a public outcry in 2004 when several Paremoremo prisoners received large amounts of compensation, after successfully claiming they were ill-treated, he said.
Mr Butler said when compensation was awarded to a prisoner, or former prisoner, victims were notified that they were able to claim it.
"Any compensation awarded [could be] eaten up by a range of claims filed by victims. [A prisoner] might get nothing, even if successful, and that's a factor they would have to take into account in bringing a compensation claim."
Yesterday, Mrs Collins questioned whether the court ruling could, in fact, open the door for more prisoners seeking compensation.
She said the Supreme Court decision overturned the decisions of other courts in the last 14 years, which had interpreted the law differently.