Lord Mackay is also considering how his plans for block contracting of legal aid cases could be applied to the private sector.
But he none the less urged would-be litigants yesterday to "take a robust approach to life" and accept that not every grievance required legal action.
In a speech pulling together the forthcoming legal aid White Paper and the overhaul of civil justice being conducted by Lord Woolf, the Master of the Rolls, Lord Mackay said: "I want to consider whether legal aid should in future help litigants in person who qualify for it by meeting their court fees and other disbursements in cases where they do not need an adviser, or where the expense of a representative would be excessive given the value of the case."
He made clear that fees for court proceedings and services would rise to reflect real costs.
The White Paper, which is due for publication the week after next, will end the system of paying solicitors at hourly rates for civil legal aid work. Solicitors and advice agencies will instead tender for block contracts.
Lord Mackay told his audience at All Souls College, Oxford: "If that approach works in legally aided cases, it may well pave the way for similar developments in the private sector. I have therefore asked my civil servants to follow it up with insurers and other potential funders of private litigation."
The Lord Chancellor emphasised, however, that "recourse to litigation is generally to be regarded as a last resort".
"Only when there is no suitable alternative is the citizen or the business concerned justified in pursuing by invoking the state's monopoly of coercive power. It is for that reason that we need to encourage people to take a robust approach of life and accept that not every knock requires a legal response."