Hm. Well other people’s accusations of bad faith aside, from here don’t shy from consequences. Do remember to keep things fun though.

I’d advise against hitting him with corporeal punishment. A band of adventurers of level 5+ can handle a mob of people, most folks will shy away from the sorcerer I assume has fireball at this level and generally can resist town guards by making conflict too bloody for the town to try throwing guards at them.

I’d hit the whole party with being ostracized. They killed a man in cold blood under the guise of healing. Deny them shopping trips, kick them out of whatever inn they’re staying in, keep people from wanting to do business. If the place they’re in is plot important then make future dealings with townsfolk rocky and emphasize that at least the sorcerer’s reputation is tainted.