I do not think cerium's suggestion requires that the beneficiaries need be regarded as plaintiffs in a civil suit, it merely suggests limits on the flow of funds.
Other than that detail, I think you make some very valid points.
I wasn't suggesting that the beneficiaries would be named plaintiffs, but that in order for the state to sue a red-light runner for running a red light, the state has to be a plaintiff, and if they cannot prove any injury from someone running a red light, then they have no standing to sue.
Apologies if I didn't make that clear in my earlier posts.
Other than that detail, I think you make some very valid points.