Labour MP Kelvin Davis says prisoners had written to him complaining about the length of their sentences before a Supreme Court judgement that Corrections had miscalculated jail times.
On Thursday, the Supreme Court unanimously ruled the Parole Act was misinterpreted by Corrections, causing miscalculated parole and release dates.
The case had first been dismissed by the High Court and the Court of Appeal.
It'll mean 21 inmates will be released on Friday following the blunder and Government minister Paula Bennett says it'll "do what's right" to fix it.
The mistake could also affect at least 500 inmates, Corrections chief executive Ray Smith says.
In context, there are around 9800 people in the prison population.
"In most cases this will only be by a matter of a few days or weeks rather than a significant period of time," Mr Smith says.
The mistake was discovered after lawyer Douglas Ewen appealed against the amount of time inmate Michael Marino had spent behind bars.
Marino was remanded in custody on February 12, 2015 on charges of family violence. In March and June of that year, further charges of perverting the course of justice were laid against him.
He pleaded guilty to all charges on July 6 and was sentenced to 22 months for attempting to pervert the course of justice, and 12 months on family violence charges.
The sentence was supposed to be served concurrently, meaning he would serve 22 months, less any time spent in detention.
But Corrections failed to take into account time he spent in detention on his family violence charges.
Instead, his pre-sentence detention was calculated on a charge-by-charge basis which meant his prison term would have ended on May 18, 2016. That meant he had no credit for the time spent in custody between February and June 2015.
Had the calculation been correct, Marino should have been released on January 12, 2016.
The ruling also affected an appeal by Edward Booth, who was put in custody in July 2012 for an offence against "A". He was charged again with offending against "B" in May 2013.
Booth was sentenced to concurrent sentences of 11 years and nine months' imprisonment on one of the sexual violation charges relating to "B", eight years on the other sexual violation count relating to "B" and six months on an assault count against "A".
Based on Corrections' calculations, Booth's 10 months in remand from July 2012 won't count as his pre-sentence detention.
If he serves his full sentence, it'll mean he'd spend 12 years and seven months in jail, rather than the 11 years and nine months' he was sentenced to.
Mr Davis, Labour's corrections spokesperson, says he's had a number of letters from prisoners questioning how long their sentences actually were.
"Corrections generally comes back and says 'no, we've got the dates right and the prisoners are wrong', well they're the system and it is very hard to change the system."
He called the miscalculation a "big stuff up".
"This doesn't help prisoners in their rehabilitation, if they've got a lot of time to dwell on the fact their date is wrong and it just breeds resentment."
Labour MP and justice spokesperson Jacinda Ardern told Paul Henry affected prisoners would be right to feel wronged.
"If you get handed down a sentence and then you spend a few months more, then of course you'll feel aggrieved - at the end of the day, if you've served longer than you're meant to that's not fair under what our justice system sets out."
She believes Correction's interpretation of the law wasn't the "natural" one.
Ms Bennett said the Government would abide by the ruling.
"You can see it was ambiguous. I think the law how it was written with the Parole Act is ambiguous. We've caught it, I mean, we're a fair and just society…we will admit the mistakes and will do what's right."
It's possible the inmates could apply for compensation, but Mr Smith says the court made no ruling on that.
"We've always acted in good faith, and we've always applied the law in the only way we could which is following the decisions of the highest court at the time that had made those judgements so any claim would need to be seen in that light," Mr Smith says.
He says the Supreme Court decision would change the way they did the calculations.
Green Party corrections spokesperson David Clendon says ruling is just the latest in a "long list of failures" for the department.
"It's extraordinary that an inmate had to go all the way to the Supreme Court to get action on being wrongfully held in prison.
"Judges and Corrections have been speaking at cross purposes for years on this issue. When Judges set sentence dates for the length of time they want a person to stay in custody, Corrections should have been following that," he says.
Justice Minister Amy Adams and Corrections Minister Judith Collins are due to get a briefing on the ruling.
Newshub.
