Tulisa Contostavlos is suing the Spice Girls founder for trying to cash in on her sex tape.
The Young singer's ex-boyfriend Justin Edwards recently admitted to leaking intimate footage of the former couple onto the internet in March and Contostavlos has now named Chris Herbert, who also managed rapper Edwards, as a defendant in her case against those leaking the video.
She claims Herbert - who had been hired by The X Factor, on which Contostavlos is a judge - hoped to make £4 million pounds along with his accomplices by selling the footage.
As a result of the legal dispute, he has now been dropped by the ITV1 reality show from his consultancy role.
A spokesman said: "As a result of us becoming aware of the ongoing legal dispute between Tulisa and Mr. Herbert, we have decided it is in everyone's interest for him to not be involved in the forthcoming series."
In court documents 24-year-old Contostavlos' lawyer alleges Herbert "played a pivotal role in commercial exploitation of the film".
It has also been claimed he was "aware of, involved in and consulted" as the scheme to see the tape online was put together.
Herbert previously worked with music mogul and X Factor creator Simon Cowell when they created boy band 5ive in 1997 but sources close to him say they he had no input in the hiring of his former colleague on The X Factor.
A source told The Sun: "They have not worked together for a number of years. Simon was not aware of this legal issue."