This is a difficult issue with many pitfalls and complications, it can destroy the bonds of friendship and can completely destroy a campaign. That being said, ignoring in character actions because you dont want to disrupt the campaign can in itself disrupt the campaign and ruin the immersion. So i do allow PVP, Dont expect me to save you guys from yourselves. IF you ruin the campaign and make a OOC Hostile environment i will simply end the campaign and start with new players. That being said PVP can be great, it can really add to the story if its done in a tasteful, friendly way. But please, before you take a hostile pvp action really think it out, is this my only option, how can i handle this in the best way, perhaps warnings first, some sort of role-play that leads up to pvp, so perhaps the offending party may realize what is going to happen and change their actions. Also how can you handle this OOC, is there a friendly comment you can make to the other player, can you have a conversation with them in advance to address your concerns, possibly looking for alternatives that make sense. These are only options and suggestions, certainly some actions leave you with no choice, you must do what your character would do right? you glance down an alley and you see your party member slitting the throat of a bartender behind his shop at the same time removing his gold pouch. What am i to do, am i a hero, what would be the right thing. So i as the dm will not tell you what to do, whats right or wrong, i will watch you kill your party members. But do know i will not put up with any OOC hostility, i expect this to be a friendly game and if we cant be friendly why are we here.