I'm sure lots of people have posted ways to make the Death Penalty fair and some of what I will post here may have been said.
For the time being this only applies for space missions as the ground missions for the Death Penalty are more unfair then for space.
So the solution to part of this Death Penalty is not being able to warp away when you know you can't win or escape so this is where Emergency Warp happens which you only get one at the start and max at any time so let me put some Q & A on how this can be done fairly.
Q. Can you get more Emergency Warp after its used?
A. Yes but only in the following way.
If you used Emergency Warp at Lieutenant you get another Emergency Warp when you get promoted but if you didn't use Emergency Warp at Lieutenant you will not get another at Lieutenant Commander this applies to all ranks.
Q. Can you buy another Emergency Warp should you be like Admiral (and any other rank) as you can't get promoted any more?
A. Yes but it should cost a lot and only from Earth spacedoc lets say it costs 50000 starfleet merits but this may need to be lower for lower ranked players in the game.
Q. Do I have to click on Emergency Warp if I know I'm about to lose?
A. No the default will be Auto but can be turned off and the Emergency Warp button should be where you can't click it by mistake and making it so you have to click it three times just to be sure.
Q. So what if I die with no Emergency Warp to get me out of it?
A. Well thats a big question and to what is fair so in short:
Rank dropped by two E.g. Admiral to Commander and so on till you drop to the lowest.
Other ships you have that are only allowed if you had a higher rank then you are now will be grounded till you reached that rank again but other ships you have at your rank are allowed.
Don't have any other ships? You get the ship you had at the start.
Inventory all gone Bank stuff will be safe but only stuff you can use at your rank and no selling the stuff you can't use.
All types of credits 50% gone.
All your Officers gone and your skill reset but not the ones you are ranked to have but you will get one free Officer of your choice.