TLDR?
The big problem with legal processes right now is that they have a high frictional cost. If that cost can be brought down -- on both sides, so that suits can be filed more widely for smaller amounts AND people have a reason to defend against frivolous suits -- then I'd say we would be better off, not worse.
It makes the scenario scarier, in some ways, than a clearly dystopian future, as one could see society falling into just such a suboptimal trap, where the gains in one area allow apathy to to shrug off the concerns in another.
I hope it's not too much to ask for both legal efficiency and fair copyright laws, not to mention privacy.
As for frivolous suits, I think you're right that leveling the playing field will also let the victims retaliate more easily. I'd hope they prove less stubborn than spammers, at any rate; I don't like the idea of spam that carries legal weight.
Having the overhead of a parasitic legal system spread thin over the entire population doesn't make it any less of a monstrous sink of lifetime.
So there would actually be two mutually parasitic industries, much as there are today for virii/virus filters, and spam/spam filters. Of course they're still both social parasites, not a nice thing, etc.
I think that would be the legal equivalent of expecting average Joes to debug their own kernels when their printer doesn't work.
As I read it, the theme is simply a legal system run amok, facilitated by data mining and hyper-efficient communication.