Alright, I understand that because I'm a pirate myself I probably don't have the most popular view on this but hear me out.
First off can we stop referring to player that interdict other players simply to kill them as 'pirates'? They're not pirates, they're murderous scumbags. Any pirate worth his salt will not kill anyone they interdict regardless of whether they cooperate or not (killing you pesky bounty-hunters is another story however

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I myself have only ever killed 1 player and that was basically because as soon as we exited supercruise they opened fire and refused to relent, however even in that case I still attempted to disable their ship and failed in doing so, in hindsight I should've probably just jumped out and I do take 100% responsibility for that players death, I am after all the person that instigated the aggression by interdicting them, they were simply reacting. I don't feel particularly bad about destroying a player that decided to pick a fight he couldn't win, however I do acknowledge that the entire engagement was started by me.
As for a solution, I honestly don't know the best way to deal with players intentionally logging-off (whether they be traders, Pirates or hunters) without catching innocent players in the crossfire. As it stands now if you punish player that log off while under attack by say having their ship remain in-game for a period of timeout after logging off then a lot of players will have deaths resulting from simple game crashes. Any sort of blanket solution like this will inevitably end up punishing innocent players, whereas doing nothing encourages the dishonest behaviour.
I propose this: first, lower the fines for smugglers, as of right they're laughably high when compared to much more serious offenses. Second, make additional insurance purchasable for both ships and cargo, (for examplepurchace pay an additional 2.5% for your ship at the time of purchase you get 97.5% coverage including upgrades, this will minimize losses for all involved. Third, increase bounties given for violent crimes, 200cr for an assault and a mere 6kcr for a murder is ridiculous. Make both scale along with the value of the ship being atacked, don't make assault too high for risk of making piracy even less lucrative than it already is but penalties for murder should be upwards of 2.5% of the ships value IMO. Not only would that discourage PKing but it would clearly mark murderous players as prime targets for the bounty hunters.