Presented for critique:

The PCs are all members of the same clan. It is a medium level clan with no real specialty; it has a finger in every pies around. The PCs clan has a relationship with a local medium clan involved in glassmaking. In exchange for some items, the PCs clan provide transportation and escort to the other clan's goods. The PCs clan also has a junior relationship with a high level clan from another city which is a major client (one of the clan elder served under a high ranking officer from the other clan and they developped a friendship). I am still working on names for the clans (suggestions are welcome).

One day, the PCs come back to the clan comp0und to find the entire clan in turmoil. A letter has arrived from the High Level clan indicating that a member of the PCs clan (a hot headed young man) has assaulted a woman from the High Level clan, insulting her honour (in other words, he has taken advantage of her). Considering the insult, the High Level clan demands reparation (in the form of blood money). They seem to be very reasonable about the whole thing (mostly based on the friedship involved here). It seems that the young man (known for his drug chewing and sexual activities) was sent on the trip to get him out of an embarassing situation at home. It was thought that the trip would be good for him. The PCs clan is now in a bind since this entire matter is putting their relationships with the other clans in jeopardy. The young man is denying the accident ever took place.

The PCs view will be examined and their suggestions taken into consideration. One of the suggestion (to be presented by the NPCs clan elders) is that a delegation be sent to the High Level clan with the money involved and the culprit to provide reparation in any way the major clan finds acceptable.

This is where I am so far.

Critique away please.

I remain,

The Masked Cucumber

Here are some thoughts on your scenario:

There are a number of generalist clans of medium status, some regional (Ripened Sheaf, Black Pinnacle, First Moon) some Empire-wide (the Golden clans). You'll probably want to pick the High Clan based on where you want to game to occur.

I'm not sure what the clan-cousin's offense was. Tsolyani culture doesn't generally care about consensual relations. Is he supposed to have assaulted the high clan woman? or verbally insulted her?

Your description implies that the assault took place in some other town than the one the PC's live in, but you don't actually say this. Also, it's not clear where the offender is. In the PC's clanhouse? Imprisoned in the other town? Could you clarify?

My sense of things is that in general, if a high clan claims that a medium clansman has offended one of their members, it's a matter for a negotiation of a shamtla (blood money) payment. The negotiators will be leaders of the lower status clan, and someone of more or less authority in the higher clan, depending on how important the matter is to the higher clan. Unless the charge is absurd, and there are high status witnesses willing to contradict the high clan claim, the medium clan is going to pay, it's just a question of how much. In any kind of a "he said, she said" situation, higher status wins, hands down. Ordinarily this would be worked out just with a payment or adjustment of existing inter-clan contracts, not by surrendering the offending medium clansman for personal punishment. It could happen, but it would be unusual.

So in the situation you describe, I don't see the bind. Medium Clan pays, and does its best to suck up and protect the valuable relationship. To suggest or even strongly imply that High Clan's claim might be false would be to insult High Clan's nobility (a noble high clan would never press a false claim...), and thus just make things worse.

This is obviously a big deal for the medium clan. Why are the PC's views being considered? Are they elders, or important clan members?

The things I can see for the pc's to do:

retrieve their hapless clan cousin, with as little expense and scandal as possible. (assuming he's locked up some where)

deliver the shamtla payment, and suck up (fun?)

find out what's behind the claim. Did he really do it? Is somebody in High Clan just shaking down Medium Clan for extra cash? Is there a bigger problem between High Clan and Medium Clan?

What do you want to happen in the game?