Published Monday, 26 May 2014
Party Leader Basil McCrea with deputy John McCallister and Tina McKenzie in 2013 (© Pacemaker)
He revealed the move after being asked at the European election count in Belfast on Monday about the recent allegations of "inappropriate sexual activity" against him.
Mr McCrea denies the allegations and would not give any further details about the legal action.
"I would love to talk about this but I have to tell you this - I cannot say anything because I am instigating legal action and I have been instructed by my lawyers not to say anything," he told UTV.
"On that basis, I'm sorry but I can say no more."
Last week a row developed between Mr McCrea and deputy leader John McCallister after NI21 changed its designation at Stormont from 'unionist' to 'other'.
The sex claims which Mr McCrea denies then emerged. Mr McCallister has asked the party leader to step aside while an investigation into the allegations takes place.
© UTV News