If the victim and the convict (or their duly-appointed representatives) are unable to arrive at such an agreement, the matter could be resolved in any number of other ways - the judge or judges who moderated the case could decide - or the jury (if there was one) - or you could even have something like professional "restitution arbitrators" who don't even have any involvement in criminal cases at all unless or until their services are needed. Any or all of these (and other) methods could be available. There is no need for a single "one size fits all" solution.
The only reason we have the "one size fits all" situation we're in today is because the State lusts to control
everything - and
always for its own benefit (NOT for the benefit of the victims of crimes, or of "society" at large, or what-have-you). That's why fines are collected and kept by the State. And it's why convicts are (so often inefficiently, unproductively, and pointlessly) stuffed into buildings filled with cages. The whole system is designed to provide power, money, control, and jobs & career advancement opportunities for police, judges, prosecutors, parole officers, wardens, guards and all the other appurtenances of the "prison-industrial complex" ...
Another possibility is that once a restitution amount is settled upon (by whatever means - see my remarks above), the convict could be taken on as an "inmate" employee at a "restitution company" that specializes in assisting convicts in paying their restitutions. The convict works for the company and his wages are divided among himself, the company, and the victim. This continues until the convict has paid the restitution agreed upon between himself and his victim, at which point he is released from obligation. Entering such a arrangement would be entirely voluntary on the part of the convict, and may or may not involve him being restricted to certain places or areas. Again, there are many possibilities for handling this kind of thing - possibilities that are far better left to the "free market" to sort out and settle, rather than power-lusting State institutions ...
Even then, there would be no need for the use of "prisons" as they are currently conceived or operated ...
For example, if a convict refuses to abide by a sentence of restitution - or agrees to a restitution arrangement and then willfully refuses to hold up his end of the deal - then the he could be duly declared an "outlaw" and will no longer enjoy any legal protections at all. He may then be robbed, beaten, killed, etc. with impunity (and this will have been a consequence of
his own choices - NOT something unilaterally imposed upon him by a fallible and necessarily imperfect legal system). Given such "outlaw" status, the victim may then seek "satisfaction" from the convict by whatever means the victim cares to employ.
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