If you have ever been approached by a person involved in a monetary dispute, you have probably found that in his opinion, his opponent is completely in the wrong with no justification at all for his position. Quite possibly, if you spoke to the other party you would encounter a reasonable person whose claims against the first party are equally valid. The fact is that in financial disputes, there often are no villains. Rather, there are misunderstandings and conditions that were never properly clarified from the start. However, it is natural for the disputants to view matters solely from their own perspectives. This fact can lead to major problems when disputants offer what they consider to be obvious proof before a beis din (rabbinical court).
The Chofetz Chaim provides the following rule: A beis din can make use of such proof only if they can personally vouch for the validity of the proof or if two witnesses testified in beis din to the validity of the proof. In such a case beis din is allowed to actually punish the defendant based on the proof provided.
The Chofetz Chaim bemoans the fact that all too often, a party brings his monetary complaints to leaders of his community, offering circumstantial evidence, and the community leaders take action based on his word alone. The Chofetz Chaim stresses that it is absolutely forbidden to take action against any party without firsthand confirmation of the evidence or valid testimony in beis din.
To believe the litigant based on his word alone is to accept loshon hora; to punish the other party based on such loshon hora is an additional sin; to exact corporal punishment would be a grave transgression of a Torah prohibition (see Devarim 25:3).