Riot Games founders and League of Legends creators Brandon Beck and Marc Merrill have encountered bad behavior in massively multiplayer online games since the days of Ultima Online and EverQuest. In all that time, the typical moderator response to the all-too-common racial epithets, homophobic remarks, and bullying that borders on psychological abuse in MMOs has been to simply ban the players and move on. League of Legends definitely could have afforded to go the same route, bleeding off a few bad apples from its 12 million daily players and 32 million active monthly players (as of late 2012) without really affecting the bottom line.
But Beck and Merrill decided that simply banning toxic players wasn't an acceptable solution for their game. Riot Games began experimenting with more constructive modes of player management through a formal player behavior initiative that actually conducts controlled experiments on its player base to see what helps reduce bad behavior. The results of that initiative have been shared at a lecture at the Massachusetts Institute of Technology and on panels at the Penny Arcade Expo East and the Game Developers Conference.
Prior to the launch of the formal initiative, Riot introduced "the Tribunal" to League of Legends in May of 2011. The Tribunal is basically a community-based court system where the defendants are players who have a large number of reports filed against them by other players. League players can log in to the Tribunal and see the cases that have been created against those players, viewing evidence in the form of sample chat logs and commentary from the players who filed the reports.