Some notes on surprise in combat, and how it works. This is all a work in progress, brain storming to try and come up with a good way to solve the problem.
How will surprise work? A person who isn't in combat will be either:
A Cautious person is expecting trouble, but doesn't necessarily know where (or who) the enemy are. They may be a guard investigating a disturbance or a SWAT officer clearing a house. The should be declaring actions on a round by round basis, and should have an initiative determined. Anyone in combat is considered to be Cautious.
The attacker makes a stealth check at the beginning of the round, against the target's awareness. If the target wins, then they know the attacker is there and can act. If the target has higher initiative (and is declaring second), then they will never be surprised.
The target may 'cover' an area, and declare to shoot/strike anything coming out (overwatch). On overwatch, the watcher has doubled initiative and is fast.
Surprise can also come from someone who wasn't visible at the start of the round. If they have lower initiative, then they must declare their action first, and so the target will not be surprised and can react to it. If the attacker has surprise on all the defenders, then any abilities to improve their initiative can be used for free.
If the hidden attacker had the advantage of initiative, then the target will have already declared before they know someone is there, so will be surprised.
An Alert person isn't expecting trouble, but is looking out for it. A guard standing watch near the beginning of their watch for example. An alert person isn't currently considered to be in combat.
When a group is making a surprise attack, then use one of the following when combat is declared:
The targets of the ambush each make a Perception x Awareness|Tactics check, against the difficulty determined by the ambush.
An unready person is not expecting any danger - in the middle of shopping or out for a gentle stroll for example.
Everything is done similar to an Alert target, except the target's check is halved.
A relaxed person is in no state to expect danger. They may be dozing, partying or totally engrossed in reading a book or playing a computer game. They get to fifth their roll when checking against the ambush. This pretty much means only a highly trained individual is going to be unsurprised by an ambush.
This is a simpler way at looking at the issue of surprise. First, some caveats.
First, ignoring how to get surprise, what happens when you have surprise?