Some ideas:
*People are elected to the committee for two years, and not allowed to stand again for another five. No more tranches.
*Arbs are not given access to CU or oversight. This will weed out people who nominate themselves to gain access to the tools. It will decrease the amount of work the committee can do; should increase their work rate on cases; and will decrease the "them and us" mentality.
*Arbs must excuse themselves if asked, including from trying to influence cases behind the scenes, unless the request for recusal is clearly silly.
*Most Arb discussion must take place in public. The mailing list should be used only in exceptional cases involving privacy. But most privacy issues should be left to functionaries. The mailing list should have a functionary as clerk to ensure that it isn't misused.
*Functionaries would not be chosen by ArbCom.
*Abolish the workshops. They're used to continue the dispute or harassment.
*We should maintain a small list of experienced editors who are willing to do jury duty. Anyone brought before the committee can request a jury "trial". Jurors would be chosen randomly. Any juror involved with a party should say no, and the next editor on the list would be picked. The parties would then have the right to object to a certain number.
*Cases must be resolved within a much shorter time frame, or closed as unresolved.
*The Foundation should be asked to pay for an expert in dispute resolution to offer regular classes on Skype for any Wikipedian who wants to sign up.
The above wouldn't solve everything, but I think it would help.
Sarah