This suggestion is in the most basic form is what people would call sanctioned violence on the surface level.
Before any of you say that fighting one-on-one is dueling; let me explain.
Think of a society that has outlawed any form of violence where no one but the military can do it. Then one day two citizens got into some sort of scuffle and couldn’t solve or conclude the matter. One of the guards suggest the both of them to do a duel since they’d be under protection by law since duels are legal and sanctioned/controlled violence with one or a few guards being witnesses to said duel. The duel starts and ends with one of the citizens in a near death state/10-20% health; one of the spectators puts the loser into incapability before one of the witnesses could conclude the duel while breaking the law. The spectator who broke the legal duel is jailed, labelled a criminal, or attacked by the witnesses/guards.
The example in the previous paragraph explains all the fundamentals and basics of what duels would do under a society that has outlawed violence in general. Now for the tough part of explaining the concepts mechanically.
Duels would or could only be an option within a town even if violence is legal or not and doing them would largely be considered a respectable and honorable action. Doing a duel means you’re excising your right as a citizen to settle a dispute or matter under the name of law. Anyone that would attack either of the two involved would be considered disrespecting their wishes to settle matters under law and humanely.
For a duel to be started must have both involved characters be within a 80% -100% health range, and dueling must be a law set to everyone or citizens only. The duelists must agree to either do a one-hit-connects duel, a duel past a certain amount of health, or to incapability. Attacking either of them before the duel is started or concluded would be considered a law break and said duel void.
The interesting part of this suggestion is that anyone could do a duel if they’re a citizen or not. Think of bounty hunting other characters as a respectable line of work or recapturing slaves via duels as honorable by law.
You are free to have any sort of comments and the sort.