Okay, okay, hear me out. Factions never go to actual war (they usually de-escalate) meaning people just sit there hoarding wealth, right?
So adjust the PK rules so that you can sue a member of ANOTHER FACTION without getting instantly capped, although obviously with the same punishments in place if for some reason you sue someone in your own faction / an allied faction.
This way, grievances can get settled another way, it provides a back-and-forth transfer of money if people successfully sue one another, and maybe it could LEAD to escalation if someone is pissed that they're losing 200k for crashing into someone on the sidewalk. I think it'd also breathe life into the much under-utilized civil portion of the legal system. Yes I'm a little biased because I am also a judge on one of my chars.
Thoughts?