Labour might have to refund more than a million pounds to supporters who were wrongly excluded from the party's leadership election after a judge ruled the party could not block new members from voting, in a boost for Jeremy Corbyn's re-election hopes.
In the latest part of an increasingly chaotically administered leadership election process, the party's ruling body had attempted to block any Labour party members who joined after 12 January from voting in this summer's leadership election, in a bid to reduce entryism.
Five Labour members raised money through crowdfunding to challenge this decision and the case was successful, in part because the judge agreed the Labour website contained a sentence promising that all new members would be allowed a vote in any leadership election at the time the individuals joined the party.
More than 130,000 new members were excluded by the original Labour decision but if the judgment stands then all of them will be able to vote in the leadership election. The decision is likely to boost Corbyn at the expense of leadership challenger Owen Smith, since many of Corbyn's supporters signed up as members in the early part of the year.
Many of the new members who were excluded later paid £25 and signed up again as registered Labour supporters in order to vote in the leadership election.
The ruling means that all excluded Labour members fit this category are now eligible for £25 in damages from the Labour party, according to lawyers involved in the case.
One Labour party source suggested to BuzzFeed News that in the region of 50,000 individuals could be eligible for the refund, costing the party around £1.25 million if they all asked for their money back.
In addition, the party has to pay substantial legal fees associated with this case in what could be a major financial hit for the organisation.
Labour's lawyers were given permission to appeal the decision by the judge, meaning the ruling could still be overturned although Mr Justice Hickinbottom said he did not want to give Labour's QC "false hope" of winning.
However, he agreed to an appeal since the case is a matter of "some general importance".
Any appeal could be held as early as Thursday but there were doubts as to whether Labour would actually choose to pursue this option.
The judge said his ruling relied heavily on Labour's loosely phrased rulebook, the interpretation of which has already resulted in one court case over Corbyn's eligibility to be on the ballot.
"This case was always based primarily on the Labour party's constitution as set out in the rule book," the judge told the court.
In his judgment he ruled that the Labour national executive committee did have "the power to disenfranchise one-quarter of the party membership".
Hickinbottom said Labour had entered into a contractual arrangement to give new members the vote and this could not be broken: "At the time each of the claimants joined the party, it was the common understanding as reflected in the rule book that, if they joined the party prior to the election process commencing, as new members would be entitled to vote in any leadership contest."
Afterwards Kate Harrison of Harrison Grant solicitors, who was representing the five Labour members, told reporters that the victory was about ensuring democracy and the rule of law were enforced: "This is an excellent judgment which shows how seriously the right to vote and the rules are taken. The NEC didn't have the power to essentially disenfranchise a quarter of the membership."
Jim Waterson is a politics editor for BuzzFeed News and is based in London.
Contact Jim Waterson at email@example.com.
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