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Lawyers for Mr Dickson Tan, 21, filed the suit on Wednesday in the High Court, which handles civil claims of over $250,000.
Mr Tan was sentenced in February last year to nine months' jail and five strokes of the cane for abetting an illegal moneylender in harassing a debtor.
A month later, despite his alleged protests, Mr Tan was caned eight times by the prison authorities.
When Mr Tan was released from prison and put on home detention two months later, his mother hired lawyer Joseph Chen to seek legal redress.
The Government admitted that an error had been made and expressed regret at the mistake.
The Law and Home Affairs ministries explained that the mistake came about because a court clerk inadvertently wrote the wrong figure on a court document relating to the sentence.
Mr Tan initially wanted $3 million in compensation, but then said he would lower his claim to $300,000.
Several rounds of negotiations apparently failed to produce any satisfactory payout for Mr Tan, who then decided to sue.
In court papers obtained by The Straits Times, Mr Tan said the authorities 'failed to exercise reasonable care, skill and diligence'.
The lawsuit claims that the prison authorities should have checked with the Subordinate Courts about the correct number of strokes before going ahead with the caning.
Mr Tan claimed that he was interviewed by three senior prison officers at the Admiralty West Prison before the caning took place on March 29 last year.
He claimed that he told all three that there was a mistake in the number of strokes he was sentenced to, but was told that the records in the file 'could not be wrong'.
On the day of the caning, Mr Tan's mother and half-sister visited him and he told them about the extra strokes.
His sister, Miss Yeow Ling Ling, said she called the court clerk, Mr Kelvin Quek, who allegedly confirmed with her that it should be five strokes, instead of eight.
According to Mr Tan's writ, Mr Quek told Miss Yeow that he would call the prison to inform them but, by then, the caning had already been carried out.
Mr Quek acknowledged his mistake and resigned.
The district judge who signed the Warrant of Commitment, which informed the prison of the sentence meted out, was also formally cautioned and restricted to hearing civil cases.
Among other things, Mr Tan is claiming damages for medical injuries, including depression and paranoid delusions, for which he subsequently received psychiatric treatment at Adam Road Hospital.
The court papers said the Government has paid a sum of $8,000 as interim payment, which was understood to have been partly used for Mr Tan's medical bills.
