Mr Farron is expected to tell delegates at the party's annual conference in Brighton that James is nothing more than a puppet of Farage.
He will also urge supporters to remain focused on the former Ukip leader, Farage, who Farron claims is still the focus of power in the party.
Farron will say: "So, yes, Ukip have a new leader. It's the fourth new leader they've had in the last few years – and the last three new leaders were all the same bloke.
"So it's nice that they've got a new leader who is actually new. Well, I say 'new', 'new' in a 'Britain went to the dogs when we lost the Empire' sort of way.
"But UKIP's policies are no laughing matter. And neither is Diane James. She leads a party whose policies are based on a vision for Britain that is closed, hateful and divided."
The attack will be launched as the former health minister Norman Lamb announces plans for a special wage levy to fund the NHS.
Lamb will say: "Let's look at the case for a dedicated health and care tax, shown on your pay packet. Let's look at whether we could use National Insurance as a basis for such a tax. We need to consider how we could make it more progressive.
"We need to think about fairness between generations. We must be honest with the British people. If we conclude that we all need to pay perhaps an extra penny in the pound then we must be prepared to say it."
The annual party conference will run from 17-20 September. On Saturday's agenda, debates will be held on homelessness, corruption and corporate crime, along with consultative sessions on nuclear weapons and sex work.