To be able to help you we will need some more information. Can you specify the exact versions of Java, JBoss Tools and the Hibernate plugins that you are using.
Can you in addition post the entire stack trace that is produced? And to really help us out in tracking the issue, can you also maybe post a minimal (Maven) project along with some instructions to reproduce the problem?
I eventually found the problem. The dom4j lib was brought in as a top level jar in the eclipse plugins directory rather than being nested in org.jboss.tools.hibernate.runtime/lib. Once I fixed my classpath, the error went away.