He outlined his thoughts to specialist lawyers at a public hearing in the Court of Protection - which handles cases involving sick and vulnerable people - in London.
The ruling by the Supreme Court in the 'Cheshire West case' was made in March and clarified the circumstances in which disabled people were legally deprived of liberty.
Sir James said the ruling meant that the number of disabled people being deprived of their liberty was 'vastly greater' than previously assumed.
And he said there was likely to be a 'very significant' increase in the number of 'deprivation of liberty' cases Court of Protection judges would be asked to analyse and monitor.
He said there were 'implications' for the court's 'ability to cope' and warned that an 'immense burden' could be placed on local authorities with responsibility for the welfare of disabled people.
Sir James said he was keeping watch on the number of cases coming into the Court of Protection.
And he said he had organised today's hearing in an attempt to map the new terrain and bring 'administrative order'.
Another hearing - where Sir James and lawyers will analyse issues in more detail - is due to take place in the next few weeks.
Campaigners have already called on the Government to issue guidance to care providers and local authorities in the wake of the Supreme Court ruling.
Charities said Supreme Court justices had provided clarity about when disabled people were being deprived of liberty under the terms of mental health legislation.
Lady Hale, deputy president of the Supreme Court, said in the ruling that disabled people had the same human right to 'physical liberty' as anyone.
And she said the fact that disabled people might be deprived of liberty in care facilities where living arrangements were comfortable made no difference.
She said a 'gilded cage' was 'still a cage'.
Seven Supreme Court justices ruled that three disabled people who lived in care facilities had been 'deprived of their liberty'.
They had analysed the cases of two sisters with learning difficulties and a man with cerebral palsy at a hearing in London.
None of the people involved was identified but the justices said the local authority with responsibility for the sisters was Surrey County Council and the local authority with responsibility for the man was Cheshire West and Chester Council.
The justices said they had considered criteria for judging whether living arrangements for mentally incapacitated people amounted to a 'deprivation of liberty'.
They said such deprivation had to be authorised under the terms of the Mental Capacity Act 2005 and living arrangements subjected to regular independent checks.
Campaigners said the ruling followed a report by a House of Lords Select Committee, which concluded that the Mental Capacity Act was failing.