I do like the idea, and have seen it before in other muds (insert sojourn, basternae, etc). One of the caveats in those muds is that paladin's can't set themselves to be vicious (kill with no mercy).

So what if the paladin class (or possibly any goodie alignment) could have this sort of toggle. It would be much more IC to view them as the only ones who would actually be merciful. And unless I'm mistaken, it would be blatantly obvious if said alignments were abusing it for the sake of an A-P.

Then it could be a reward for an evil sort if they display good RP for torture, then perhaps they could be awarded the ability to toggle that sort of thing. Again, probably far too much work for a simple RP tool, but the above would be my two cents.