Taking to Twitter, Richard W Painter wrote: “44 v.45 now looks like a very good libel case even under the high standard for libel against public figures,"
Mr Painter, who served as chief ethics lawyer for four years during the Bush administration was referring to the fact that Mr Obama and Mr Trump are respectively the 44th and 45th American presidents.
Known for being a litigious during his business career, Mr Trump said during his election campaign that “one of the first things” he would do as President would be to change the libel laws, making it easier for people to sue those who make false and defamatory statements about others.
Under British law, the defendant or publisher has to prove the truth of the statements in dispute. The plaintiff only has to show that the statement harms his reputation, without having to show that any damage has actually been suffered.
US courts require such public plaintiffs to show both falsity and actual malice. This actual malice standard requires the plaintiff to show by clear and convincing evidence that the defendant knew the material was false, or published the material with reckless disregard for the truth.
Mr Painter, who is himself currently suing Mr Trump for violating the Constitution, has nonetheless suggested the existing laws mean Mr Obama could already have a strong case against his successor.
Mr Trump has refused to retract the widely discredited claim he made on Twitter that the former President had his offices wiretapped during the election campaign last year.
He has not produced any evidence to back up his allegation, which Mr Obama has dismissed as “simply false". US intelligence services have also dismissed it.
Mr Obama has made no public threats to sue and is not thought likely to do so, although there have been previous attempts to sue presidents.
In 1972, President Richard Nixon was sued for damages by FG Fitzgerald after Nixon had him fired from his job as a civilian analyst in the US air force.
The court found the President should be afforded “absolute immunity” from such civil actions because his “unique position” made him “an easily identifiable target for civil damages” - a ruling which would make it difficult for Mr Obama to take action against Mr Trump, although not impossible.
The President can be sued over personal matters while in office, as Bill Clinton was in 1997 when Paula Jones brought a case against him for sexual harassment.
He settled the case out of court with a payment of $850,000 although her lawsuit was dismissed.
Before the election, at a rally at Forth Worth in Texas, Mr Trump pledged to “open up our libel laws” so that when people say “purposely negative and false” things about him, “we can sue them and win lots of money”.
He said he needed to do this so that when journalists wrote things about him that are “a total disgrace … we can sue them and win instead of having no chance of winning because they are totally protected.
“You see, with me, they're not protected, because I'm not like other people but I'm not taking money. I'm not taking their money .. We're going to open up libel laws, and we're going to have people sue you like you've never got sued before.”
If Mr Obama does decide to take legal action against Mr Trump, the President’s personal legal team has ample experience of dealing with lawsuits.
In February, it was revealed he had been sued more than 50 times in a period of just over two weeks since taking office.
The cases, brought in 17 different states by a range of organisations and individuals, concerned a host of issues from his business deals to his executive orders on immigration.
Mr Painter is one of those who took legal action against Mr Trump, suing him for violating the Constitution after he refused to sell off some of his assets and place the rest in a blind trust, as every previous president has done.Reuse content