City A.M. understands that Sorrell has consulted lawyers following the American media organisation's publication of information relating to his departure from the world's largest advertising firm in April.
At the time, Sorrell's decision to step down was shrouded in mystery after the board of WPP agreed to keep the findings of its internal investigation confidential. Sorrell has since announced his involvement in a new marketing venture, S4.
The latest row comes as WPP chairman Roberto Quarta prepares to fend off a potential rebellion from shareholders at the company's annual general meeting on Wednesday.
Last week, City advisory group Pirc told shareholders to vote against WPP's remuneration report due to the "highly excessive" package that had been handed out to the media giant's outgoing chief executive. Sorrell will receive variable pay equivalent to 1,060 per cent of his salary.
A separate report from Institutional Shareholder Services also took issue with the pay plan lined up for Sorrell, saying: "Given the unclear nature of his departure, a question can be raised as to whether this was appropriate," although the group went on to tell shareholders that reinstating Quarta as chairman would be in the company's best interests.
On Saturday evening, WPP claimed that it was unable to publish the report into Sorrell's misconduct due to laws around data protection.
"WPP has been advised that it cannot disclose details of the allegations against Sir Martin Sorrell because it is prohibited by data protection law from giving such details," a spokesperson said. "Sir Martin chose to resign at the conclusion of the investigation by independent legal counsel."
In a statement, a spokesperson for Sorrell said that a non-disclosure agreement prevented him from talking about any of the details related to his exit from WPP, though he strongly denied the claims published in the WSJ.
"Sir Martin signed a non-disclosure agreement when he stepped down which precludes him from discussing any of the circumstances surrounding his departure," the spokesperson said. "He has rigidly adhered to this obligation and will continue to do so.
"As regards the allegations which have appeared in the Wall Street Journal, Sir Martin strenuously denies them. He will be making no further comment at this time."
A WSJ spokesperson told City A.M.: "We stand by our reporting."