Barry George, the man wrongly convicted of murdering TV presenter Jill Dando, is not entitled to compensation, the high court has ruled in a judgment that may affect scores of miscarriage of justice cases.

Lord Justice Beatson and Mr Justice Irwin, upheld decisions by ministers to stop George – and three other men who were freed from prison – getting payment for their time in jail.

The highly complex judgment is the first time lower courts have applied a supreme court test, set out in 2011, on deciding whether compensation should be paid to claims for overturned convictions.

In that earlier landmark decision, the UK's highest court decided that a miscarriage of justice occurs "when a new or newly discovered fact shows conclusively that the evidence against a defendant has been so undermined that no conviction could possibly be based upon it".

The supreme court panel explained at the time that: "A claimant for compensation will not need to prove he was innocent of the crime but he will have to show that, on the basis of facts as they are now known, he should not have been convicted or that conviction could not possibly be based on those facts."

Not all miscarriages of justice, it follows, will lead to compensation. "Procedural deficiencies that led to irregularities in the trial or errors in the investigation of offences will not suffice to establish entitlement to compensation," the supreme court judges explained.

In the case of George, the judges found the secretary of state was "entirely justified in the conclusion he reached" not to award the 52-year-old compensation.

Dando, 37, was shot dead outside her west London home in April 1999. George was convicted of her murder in 2001 but acquitted at a retrial in 2008. He had hoped a positive ruling could have led him to claim an award of up to £500,000 for lost earnings and wrongful imprisonment.

George's solicitor, Nick Baird, said: "We are very disappointed. We shall be applying to leapfrog the court of appeal to have the matter heard at the supreme court."

In a fifth case, the judges decided Ian Lawless, who spent eight years in jail after confessing to the murder in Grimsby, before his release on appeal in 2009, should have his claim reviewed by the justice secretary, Chris Grayling. His conviction was ruled unsafe after new evidence found a "pathological need for attention". The judges said a decision to refuse him compensation was flawed and must be reconsidered.

The other three who failed to persuade the judges they deserved compensation were Ismail Ali, Kevin Dennis and Justin Tunbridge.

Ali was convicted of assault occasioning actual bodily harm upon his wife at Luton crown court in 2007. His conviction was quashed by the court of appeal in 2008.

Dennis was convicted of the murder of Babatunde Oba in 2000. His conviction was quashed in 2004 and a retrial ordered. During the retrial in 2005 the trial judge agreed with submissions that there was no case answer and directed the jury to acquit Dennis of murder. His conviction for violent disorder remains.

Tunbridge was convicted of two counts of indecent assault in 1995. His convictions were quashed by the court of appeal in April 2008.

Another 11 miscarriage of justice cases are due to come before the high court soon.