Labour risks a £5 million hit to its election war chest as a result of the spiralling legal costs of an anti-Semitism lawsuit against five former staffers.
At a hearing on Tuesday, the party will learn how much it would have to stump up if it loses the case, expected to be held next summer. A negative result could seriously dent its finances and reopen internal rifts ahead of an autumn election.
Labour is suing five former officials who worked for Jeremy Corbyn, including Seumas Milne, his head of communications, and Karie Murphy, his chief of staff.
Georgie Robertson, Laura Murray and Harry Hayball, all former aides to the ex-Labour leader, are the other three ex-staff members facing the legal action.
Labour alleges that the staff members leaked an internal report on the party’s failures when dealing with anti-Semitism cases. All five deny releasing the document.
Both sides will appear at a preparatory meeting at the High Court on Tuesday, when a judge will schedule the full hearing and set out the expected costs.
The Telegraph understands that Labour’s lawyers have been arguing they need more time and it should be pushed back from next summer until early 2025.
That would mean, if the party were to lose the case, the substantial legal costs would not fall until after it had fought the general election.
A delay would also avoid Labour having to campaign against the backdrop of a divisive court battle that risks reopening rifts between its Left and centrists.
Labour, which recently raked in a record £6.4 million in private donations in just three months, launched the case after being sued by nine anti-Semitism whistleblowers whose identities were divulged as a result of the report being leaked.
It is defending the claim and issued a counterclaim against the five former staffers, accusing them of being behind the breach, meaning they would pay any damages.
The 850-page anti-Semitism paper, drawn up as a submission to the equalities watchdog but never filed, was leaked shortly after Sir Keir Starmer took over as Labour leader.
The Equality and Human Rights Commission later concluded that the party had been responsible for “unlawful acts of harassment and discrimination” against Jews.
Earlier this month, the original nine complainants dropped their case. It is not clear whether they reached an out of court settlement with Labour.