This error is actually a permissions issue. The issue typically occurs when trying to Install LabTutor Client by trying to connect to an already-installed LabTutor Server through Internet Explorer, rather than running the LabTutor Teaching Suite Installer. To resolve this issue, manually install the LabTutor Client using the .msi installer (downloadable here). Then, run the Installer with elevated privileges - ensure you are logged on as an Administrator, and right-click the Installer file and select 'Run as Administrator'.
This should prevent the error message, allowing for a successful LabTutor Client installation.