It's a backup emergency button. If you're absolutely out of mana and need to live, use Lay on Hands on yourself or a party member (using it on yourself might be better since you can always ressurect someone later) will restore either yourself to full damage or someone else's HP equivilent to your maximum HP. Basically if you have 600 HP it cures for 600HP. Lay on hands has a 1 hour cooldown so is basically only for duels/emergencies.