After upgrading EPiServer from version 7.0 you might get the following error when trying to insert images on your EPiServer site:
This error occurs when an old version of the assembly Newtonsoft.Json is installed in the GAC and is being used instead of the EPiServer one. You can verify this by navigating to the .NET GAC:
C:\Windows\Microsoft.NET\assembly\GAC_MSIL
If this folder contains an old version of Newtonsoft.Json (typically version 4), it is most likely the cause of the problem.
You can remove the assembly with GacUtil, see this article for more information:https://msdn.microsoft.com/en-us/library/aa559881.aspx
After removing the assembly and restarting the EPiServer page the problem should be resolved.