I just watched someone get slandered on Steem. Where is the arbitration?

I just created my account today. I even funded it from bitcoin immediately after reading only the whitepaper.

I noticed immediately that the authors took a lot of care in mitigating certain technical risks, but left the social risk of outright slander unresolved. Incredibly, in the top 10 posts, someone called out a bunch of users for child pornography, and yet, under examination, none of it would qualify as such in any court of law. Some of the images were even stolen directly from adult websites and therefore are defacto, not child porn.

I saw nothing that justified the original accusation, and yet the poster stands to gain some $250. Incredibly, over 300 people liked the post, indicating that they never made more than a cursory review of the case.

A user who was surreptitiously caught up in the mess, had his unrelated posts flagged. His reputation plummeted.

In any sane world, this user would have standing to sue the original poster for material damages. Where is the arbitration? Where is the justice? Where is the adjudication?

If I will be making any substantial investment in a block chain backed content origination system, either as an author or a stakeholder, it had better have strong safe guards against outright loss due to slander.

I propose that any future system based on the Steem premise should be partitioned into discrete communities with well-defined rules of engagement. One block chain, multiple communities. More importantly, ARBITRATORS should be designated and paid, per the rules of that community, to address any cases that come up. A defamed user should be able to take his case to be adjudicated within the confines of the social group, most likely paying for the privilege. And if the defamer loses, the judgement should be a material transfer of currency and loss of reputation.

Anything less is nothing more than a re-implementation of Facebook andTwitter. I don't know whose capricious judgement I'm more concerned about, Mark Zuckerberg's or a mob of prude busybodies.