Any character who takes more than his Stamina in bashing damage or any amount of lethal damage is Beaten Down: He’s had the fight knocked out of him.
He must spend a point of Willpower every time he wants to take a violent action until the end of the fight.
He can still apply Defence against incoming attacks, can Dodge, and can run like hell, but it takes a point of Willpower to swing or shoot back.
A character in this state is offered a choice before every point of Willpower spent: he can surrender, giving his attacker what she wants according to her declared intent.
If you give in, you gain a point of Willpower and take a Beat, but you take no more part in the fight. If the other side wants to attack you, they’ve got to spend a point of Willpower to do so, and probably suffer a Breaking Point. If everyone on one side has surrendered, the fight’s over and the other side gets what they want.
If one side’s intent involves violence, the other side can’t surrender — not without being killed. If that’s the case, their intended victims don’t get Beaten Down, and gain no benefit from surrendering. When someone wants to kill you, the only thing you can do is to try to stop her, whether you run like hell or unload a shotgun at her.
These rules only apply to people who would incur a Breaking Point or Act of Hubris for committing (or attempting) “murder.” Creatures that don’t have a problem killing people in general can ignore surrender without penalty and don’t have the fight beaten out of them like normal folks.