See this ingenious shiur by Rabbi sacks on Parashat Yitro. He is analysing the parsha in which Moses appoints judges of thousands, hundreds, fifties and tens. What exactly did this achieve? Rabbi Sacks suggests that these judges, untrained in Jewish law - helped people come to peaceful resolutions on the nasis of compromise. They were mediators. Here is an excerpt:
Moses preferred strict justice to peace. He was not a man to compromise or mediate. In addition, as the greatest of the prophets, he knew almost instantly which of the parties before him was innocent and which guilty; who had right on his side and who did not. It was therefore impossible for him to mediate, since this is only permitted before the judge has reached a verdict, which in Moses' case was almost immediately.
Hence Netziv's astonishing conclusion. By delegating the judicial function downward, Moses would bring ordinary people - with no special prophetic or legal gifts - into the seats of judgment. Precisely because they lacked Moses' intuitive knowledge of law and justice, they were able to propose equitable solutions, and an equitable solution is one in which both sides feel they have been heard; both gain; both believe the result is fair. That, as the Talmud says above, is the only kind of justice that at the same time creates peace.
The entire shiur may be found here.