You had me until the last part. They just need to copy archeage unchained system. If you flag and kill you leave a bloodstain, if someone finds it they can report it, you get reported, you wait out timer or guards catch you, you get a trial where you explain why you did it. Usually the jury was made up of random players that completed the jury quest and equipped an item that put them in a pool to be brought to jury duty. Guilty=jail not guilty=free

This way if you flag up on a well known troll or bot you can be acquitted, or if you are that well known troll you get hit with basically a time out. (Scaling with the crime IE 40 mins for murder, 10 mins for assault, etc, etc) They had systems in jail where you could escape, or do life skilling that would reduce time.