Assemble around a table in your home or classroom. Include any witnesses --- family, friends, classmates or even neighbors, if they are willing and involved in the situation. Let them know that this assembling represents their local City and Town level courts.
Allow the plaintiff to state his dispute. Listen carefully to all that is said. Write down important facts, such as time, date and individuals involved. Make sure to have them swear to tell the truth and nothing but the truth. You may involve other members of your group to participate by writing down the facts and keeping time.
Listen carefully to both sides of their story. Make it clear that no interruptions are allowed, while others are speaking. If there are interruptions, that person will need to leave the room. He may come back when that person is done speaking.
Examine the story and evidence carefully before making any decisions. If you believe that the information needs more evidence, you can reconvene until the evidence is brought forth. The case can be promoted to the Supreme Court (your spouse or principle), if you believe that it is out of your realm to make a judicial decision. In real time, cases brought to the Supreme Court are of national importance. Likewise, cases brought to your spouse/principle are of greater importance.
Come to a final decision as to who is in the wrong. Be prepared to distribute punishment fairly. Adjourn until a later time or date, if you are not sure of what punishment to allocate. Always make sure that you are fair. You want to ingrain in the child's mind that the justice system is impartial. Always follow through with punishments.
Reinforce their home/classroom court experience with online games, such as "icivics". Online games are used as a powerful reinforcing tool. In an article from the Department of Education, U.S. Secretary of Education Arne Duncan stated, "We know that children of all ages are engaged when given the opportunity to learn with new technologies."