Labour National Executive Committee has won its appeal at the High Court, with the result that more than 130,000 new members will be barred from voting in the contest.
The decision is a setback for Jeremy Corbyn’s leadership campaign – but it also leaves his critics open to the charge of desperate measures.
It could also mean a huge bill for the new members who brought the case, after Labour’s QC demanded £30,000 in legal fees.
Paddy Lillis, chair of the NEC, said: “The Labour Party welcomes the decision of the Appeal Court. The Party has said consistently throughout this process that we would defend vigorously the decisions of the NEC.
“It was right that the Party appealed the judgement on the freeze date, just as we would have appealed if the Court in the previous case did not uphold the NEC decision that the incumbent Leader of the Labour party did not require nominations.
“It is crucial to the Labour Party that our governing body has the authority to debate, decide and implement the procedures, timetable and voting eligibility for our internal elections and selections.”
But the members are determined to fight to the bitter end, and have applied to take their case to the Supreme Court.
Corbyn’s campaign stated in response to the judgement: “We think that this is the wrong decision – both legally and democratically.
“The Court’s ruling disenfranchises nearly 130,000 Labour members, who joined the party since January and were explicitly told that they would have a vote in any leadership election.”
According to the Corbyn campaign, the appeal was won thanks to a new legal argument, which it claimed was a “make it up as you go along” rule.
Owen Smith, the challenger, tried to distance himself from the decision.
He said: “I had welcomed the prospect of 125,000 additional members being given the opportunity to vote in this vitally important leadership election.
“The decision of the Appeal Court today doesn’t change my approach to this contest; I am getting on with the job of talking to as many members and supporters across the country as possible and making the case for a united, radical and credible Labour party.”
The legal tussle can be traced back to Corbyn’s grassroots movement and the decision of the party’s National Executive Committee.
Since Corbyn took over as Labour leader, the party has swelled with new recruits, mostly believed to be loyal to him.
When setting out the rules for the leadership contest, the NEC introduced a six-month cut off point designed to stop more recent joiners from automatically getting a vote. Instead, they would have to pay £25 to get one.
Defenders of the decision say this rewards longstanding party members and prevents entryism. Critics say it freezes out enthusiastic new recruits who may not be able to afford a high fee.
A group of new members decided to get the argument settled in court, and on Monday, the High Court ruled in their favour.
According to the BBC, the decision added between 126,592 and 150,000 more voters to the franchise.
But the Labour party decided to make an appeal, which it has now won.
Despite the court ruling, the loss of new members may prove to be a superficial dent to the Corbyn campaign, with one YouGov poll predicting he would win by a landslide.