I suppose they will let a judge determine everything and just give the neighbor or whoever did the snitching the power to pick from some punishment options such as whether to pay a fine or do community service or something of the sort.

The whole idea I suppose is to make it more like communism were the whole community is divided and snitching on each other.

It's a way to force involvement by the community in the same manner of how Jews and Muslims have a stoning capital punishment were it's performed by the society rather than just the executioner.