@ Si, had a lot of fun m8.
I agree, and this is a prime example of how such events kick off. It starts off small and grows in players.
And once the battle has started its hard to get ppl to stop and and reform under some rules.
But that's exactly what we have to do. We have to decide at what point a simple 3 on 1 RP-PVP becomes a "mini-event" / battle for a system.
Once there were 3-4 on each side, we should stop the melee, elect group leaders, agree to rules of engagment and start again. Once restarted only group leaders would have the power to stop the melee.
This will take some disipline on everyone's part.
But once the melee has stopped, we could group up and each group exit the system and dock. Once that happens neither group should dock in the contested system. Then respawns woud occur outside the system and we would be able to tell when one side is victorious.
I don't like the one-death and your out rule, because everone likes another shot at whoever killed them, etc.
But we could do it with rounds where newcomers and the dead remain outside the system until everyone in one group is defeated. That round would go to the victory, then the everone would respawn as a group and then round 2 would take place and so on. This would go on until one group gained a superior number of victories or capitulated.
I also like the idea of matched numbers of ships. Perhaps for each round we could add newcomers and freelancers to even up the numbers. It would be the group leaders reponsibliliy to add members to their group (chat).
Although fighting my good friend Gunny 3 on 1 seems to be the wisest course of action. 
As for newcomers and freelancers, we would just need to deal with them. I don't want to exclude them I want everone that can participate to do so. If a freelancer joins the battle and kills a group member, that group member would be able to respawn and reenter, after telling the freelancer what is going on and encouraging them to pick a group, goto that groups respawn base and await the next round,
Please continue to post your ideas, my opinion is just one of many and everyone's opinion is valuable.
Regards.