While it is an interesting idea, I can't imagine how it would work. The problems that I see mainly are that there is no way at all to produce IC evidence, like eyewitnesses, physical evidence, etc. All that stuff would be made up by the players, who are free to make up anything they want. So an IC trial would just depend on who is more adept at making stuff up, or who has more IC friends to act as character witnesses, or help in the "making stuff up" part.
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