I'm mainly addressing this to Erik, since he wrote the backdrop article, but anyone else feel free to chime in.
Does Diamond Lake have a local magistrate, or are all criminals transported to Greyhawk?
I'm planning on having Filge tried in Greyhawk (should Smenk be unable to secure his release), given the potential seriousness of his crimes (housing a small gang of undead creatures), but what about for crimes such as assault, theft, disrupting the peace, etc? I can't imagine Neff performing any judicial duties, given his lazy, self-centered nature.
And what about legal representation? Your average miner couldn't afford it, but Smenk & Dourstone could. And are all legal proceedings done in Ancient Sueloise, as they are in Greyhawk?
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Just a little bump and input.
Typically the Governor-Mayor would be the judge and jury for affairs that are "local". I have a minor official that represents the Domain's interests in the area, recording all taxes and judgements. Anything that should go to the judicial system of the Free City will have the scribe sending out a notice immediately. The scribe wants to get out of Purgatory, er, Diamond Lake, so will be beyond bribing on any issues that he suspects the Directing Oligarchy would be concerned with. Evil cults within the Domain have a long, disruptive history (Iuz, Vecna, Tharizdun) and those harbouring cultists should receive attention from the Free City itself.
Neff's lazy, self-centred attitude makes him a perfect magistrate as he'll be very receptive to bribes so he can get back to important things, such as the creation of his own Winchester Mystery House. I would have Filge tried locally but Ragnolin Dourstone (and Smenk if evidence isn't destroyed) would be carted off to the Free City. The power vacuum in Diamond Lake mine manager ranks would be a helluva side story.
Creative Director
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In the office campaign, there's actually several competing law-enforcement groups. The one our group seems to have latched onto is the Garrison and the associated church of Hieroneous.
In other campaigns, the main law could be the sheriff and his corrupt boys, the church of St. Cuthbert, or even Smenk's thugs. Diamond Lake's a fairly dynamic place, and the addition of a catalyst like Player Characters is probably all it needs for one of these groups to step up into a dominant role.