The boundary between being mentally stable and mentally unstable is unclear. Melville suggests that it is the responsibility of the reader to decide whether or not the surgeon's assessment of Captain Vere's mental condition is accurate.

The worst possible timing has been marked by the occurrence of a fatal event. Given its close proximity to the recent mutinies, it demands exceptional leadership qualities from the commanding officer, such as prudence and vigor. Melville observes that these attributes are not easily combinable.

According to the law, Billy's fatal blow has caused a confusion of guilt and innocence, as he, the perpetrator, is now considered guilty of causing harm, while Claggart, the victim, is seen as having suffered from violence. This is true even though Claggart had been attempting to harm Billy.

Captain Vere, who is known for making quick decisions, decides that it's more important to be cautious than hasty in handling the current situation. He chooses to keep the incident confidential until its conclusion is determined. However, some of his peers will criticize Vere later for being secretive.

Captain Vere would rather restrain Billy and hand him over to the admiral when the Indomitable rejoins the fleet. Nonetheless, he is fully aware of his responsibilities as a commander. Additionally, he understands that his crew will soon notice that something is wrong, and any delay in dealing with the situation could provoke them.

So, he makes the choice to hold an informal court-martial consisting of the first lieutenant, the sailing master, and the captain of the marines. His main worry lies in selecting the captain of the marines, who lacks experience as a sailor. Despite being a dependable fighter during conflicts, Vere is uncertain if bravery equates to competence in resolving ethical issues.

He is not worried about the first lieutenant and the sailing master because they are knowledgeable about both the practical and combat aspects of sailing.

Billy appears in court and Captain Vere testifies as the only witness. The captain tells the whole story in a brief and complete manner. When asked, Billy confirms that the captain's account is entirely accurate. However, Billy asserts his innocence of Claggart's accusations. Vere indicates that he believes Billy's statement. Overwhelmed with emotion, Billy stutters and expresses gratitude to Vere, saying "Your Honor, God will bless you for that!"

In his testimony, Billy affirms that he did not harbor any ill will towards Claggart and had no intention of taking his life. He clarifies that he was unable to respond to Claggart's untrue accusations verbally, and was left with no choice but to resort to physical violence as his only means of communication, although he deeply regrets this action and seeks divine aid.

When Billy is asked why Claggart would lie about him, he is unable to provide an explanation. However, Vere steps in to help and suggests that only Claggart knows his own thoughts and intentions. Vere also states that the reason behind Claggart's actions is not important, and that the only relevant factor for the court to consider is the result of Billy's actions when he struck Claggart.

Vere states that until now, he has only been fulfilling the role of a bystander in the case. But because he sees the court's reluctance to make a decision against Billy, he feels he must now act as a supporter. He praises the officers for showing kindness, which he also feels. Nevertheless, he believes it is his duty to "overcome his doubts."

He encourages the officers to confront their uncertainties and address them directly. He poses a rhetorical question, wondering how they can condemn an individual as guilty before God when they may be innocent. Although their reluctance to do so may be a natural inclination, their ultimate loyalty is to the King, not to their natural instincts. The officers who serve the King have forfeited their ability to act as independent agents and must abide by the laws of the sea.

The marine captain acknowledges that Billy had no intention of committing mutiny or homicide. However, Vere points out that such a statement holds no significance in a martial court that follows the Mutiny Act's law. According to that law, Billy's intent is not relevant.

Vere argues that there are only two options available: to either find the defendant guilty or not guilty, and they cannot find them guilty and reduce the punishment. He is concerned that reducing the punishment may appear to be random or lacking in resolve, which could provoke additional acts of rebellion.

Even though the officers don't completely share Vere's opinion, they remain faithful to him. Furthermore, Vere's anxiety about how their verdict will be viewed by others affects them. As a result, Billy is found guilty and given the punishment of being hanged at daybreak.