I think a lot of problems with bounty hunting could be solved by a simple adjustment to the flow of bounty hunting interaction in a rather familiar way. As it stands, when a bounty is posted on an individual, or from a posted blanket bounty, those who can bounty hunt are able to engage those targets on sight and attack with sufficient roleplay.
Rules wise it seems that the bare minimum acceptable actions here are are least 2 lines saying something regarding the engagement, and about 10 seconds before engaging. In that time a variety of tactics may occur on both sides.
The problems that come up mostly seem to be that a bountied target that is not a combat ship may try to escape, or attack the attacker with no reply, or run while the bounty hunter is waiting the fair period. Its also an aggressive move in the case of transports, and I find that a few little things like that discourages laying bounties.
Its not that its terrible as it is, but I have always wondered what it would look like if bounty hunting went like this:
When you post a bounty on a target, the target gets the chance to pay out the bounty if they get caught. So, if you post 15 million on a ship, blanket or individual bounty, and a merc/BH comes across the target, he seeks the bounty first.
So bounty hunting becomes like commissioned piracy. He would, like a pirate, intercept the ship and make a demand of the posted bounty. If the ship is capable and willing of paying it off, and chooses to comply, the BH takes the money and lets the target go, and gets paid by the target, and not the poster. Only if the target refuses and is destroyed then does the poster need to pay the bounty.
This way, bountied ships, like pirated ships, will know they have the option to stop and pay their way out. There is also a need to reply to the interaction like in piracy that draws an easier line to see when you get a clear refusal or a clear attempt of flight/fight.
I'd also be interested to see how it effects the value of bounties. You might think every individual bounty would be 50 million but also remember that the target might not be worth that much at the time and prefer death, making the poster pay big in the end. I think ironically bounties would stay reasonable since there are no guarantees on either end over who will have to front the cash. I think this would make laying bounties a little more fun, especially for revenge, as you may get to drain your opponent's pocket, or you may have to pay up yourself.
To keep it reasonable I'd see this only applying to pre-posted bounties, not for in game hiring for spot engagements. At the very least, it should work this way for transport bounties. People would be less afraid to bounty traders since they'd have their fair chance to pay their way out, just the same as they already do with piracy. Allowing the option for combat ships would be good for small scale battles, but I'm sure most would prefer to be able to engage combat ships asap without a need for replying to a demand, which is less of a problem when the target is flying a combat ship and more likely ready/able for fighting.
I was actually musing over this the other day. I've never been a fan of how factions can bounty transports Sirius-wide, and then Merc IDs can stalk said transports Sirius-wide AND blow them up without a demand. It'd be good if this could change.