The sin eater is not a person, but a server. Most habitats in the solar system are small, below 1,000 egos. One of the primary goals of a justice system must by necessity be the prevention of feuds and vendettas, which can easily become devastating in small, isolated communities. On habitats using sin eaters, the first measure of justice is compensation for injuries, often effectively blood money. In immortal transhuman societies, it is not easy to do someone truly permanent harm, and so some manner of repayment can usually be agreed upon.
Once appropriate compensation has been made, everyone, including, of course, the parties involved, has their memories of the incident removed and stored in the sin eater. If no one has significant memories of a crime, if harm has been countered by compensation, than the crime might as well have not occurred, and peace is maintained. The sin eater, however, also acts as an archive, and memories can be retrieved if it becomes necessary.
Plot Hook: Notorious criminal hackers the ID crew have been rebuffed one too many times by the scum ship Eric the Red. Eric the Red makes use of a sin eater, giving the ID crew an opportunity. In a single grand hack, they plan to retrieve all stored memories from the sin eater, and simultaneously restore them to their egos, causing chaos. Helping the ID crew could net a PC g-rep, helping stop them could earn @-rep.