This is for civil small claims cases, in which lawyers are rarely involved and which are largely set up to support people litigating in person.
They tend to be more about arbitration of unpaid invoices or failure to provide a service that's been paid for etc. I have a couple of friends who have used the small claims courts either against non-paying customers or companies that have stiffed them. In all cases they attended in person and were supported by the court staff rather than lawyers, and they all had good things to say about the staff and the system in principal.
These are very much not cases where high paid lawyers square up against each other and slog it out in a dramatic battle of rhetoric. In fact I've heard from a number of people that the judges who preside tend to take a dim view of trained lawyers trying to steamroller or confuse non-lawyers on the other side. These are not cases involving complex points of law. If the case gets more complex then it may be referred to a higher court.
This proposal makes a lot of sense to me for those sorts of cases. While the cost of using the small claims court can put people off using it, the time and disruption, especially if they are running a business, can be more of an impediment. The ability to handle much of the case without having to attend in person would make the whole system much better, and if it reduced the costs it would make the small claims court more accessible to many people to seek redress from companies. There's also lots of potential to design the online system in such a way as to provide lots of help and advice to non-legal people to they can make their case batter, which should also make the whole process more effective and fair.