An eBay-style online claims court should exist to handle civil cases where less than 25,000 is at stake, according to a Civil Justice Council report.
The Online Dispute Resolution (ODR) report warned the civil justice system is "creaking", and urged Her Majesty's Courts and Tribunals Service to establish an online method of resolving small disputes as a way to speed up such proceedings while taking the burden off courts across the country.
It cited a number of private sector examples of ODR already, including eBay, where 60 million disagreements a year are resolved online.
The report, from the Civil Justice Council's Online Dispute Resolution Advisory Group, read: "For low value claims, we are concerned that our current court system is too costly, too slow, and too complex, especially for litigants in person.
"To overcome these problems, our main recommendation is that HM Courts & Tribunals Service should establish a new, internet-based court service, known as HM Online Court (HMOC)."
HMOC would serve three functions, starting with online evaluation, which would let users with a grievance categorise their problem, inform them of their rights and explain their options.
The second function would provide "online facilitators" to solve disputes without judges, who would review papers and statements to help the parties in a case negotiate.
For cases considered too complex for that, full-time and part-time judges would review and rule on either entire cases or parts of cases from documents submitted electronically.
The report claimed HMOC would require a small fraction of the HM Courts & Tribunals Service's annual 75 million reform budget, and urged political parties to support the concept, but said judges would require training to participate in HMOC.
HM Courts has already welcomed the report, and Lord Dyson, chair of the Civil Justice Council, said in a foreword to the report: "There is no doubt that online dispute resolution (ODR) is an area with enormous potential for meeting the needs of the system and its users in the 21st Century."
IT industry trade body techUK's head of cyber, justice and emergency services, Ruth Davis, said the concept is sound, but called for a cohesive IT strategy across legal and police services.
She said: "The technology industry welcomes the work being undertaken to digitise the courts system. "Technology has a key role to play in increasing efficiency and reducing costs at a time of shrinking budgets.
"However, it's vital that digital innovation across the criminal justice and policing systems is joined up, rather than just addressing the needs of individual organisations.
"In our manifesto we called on the next government to deliver a single criminal justice and emergency services technology strategy, which will deliver operational efficiencies and drive innovation, for the benefit of the government and its citizens."
