We have a fairly simple rule.
If you cut a corner and gain advantage , you allow the other person to pass,
If you hack some one you wait for him to get ahead again.
If you dont you are out.
If you cut cnrs or touch 3 times in a race you are out.
And we have a drivers breifing where i tell the guys NO CONTACT! or your out.
I police the racing and decide who to penalise based on the situation at the time.
Our club doesnt have many members so all our racing is a Amain so to speak, so we have experienced guys running with newbies.
This system seems to work well at this point ,tho as things get more serious we may have to look at it again.