How can a church wisely practice discipline in a litigious society?

Teach all prospective members that if they join the church, they will be subject to its discipline. That is, if they sin, they will be confronted about it, and if they refuse to repent of sin, the church will pursue the process laid out in Matthew 18:15-17, even to the point of excluding them from the church. Membership classes are one obvious place to offer this instruction.
Include explicit statements about church discipline in the church’s governing documents. In their constitution, by-laws, articles of incorporation, and any other legal documents they have, churches should explicitly state that if a church member persists in a course of unrepentant sin the church will exclude them from membership as an act of discipline, and that the congregation will be informed of the person’s actions so that they are able to make an informed judgment regarding the matter, which is their biblical responsibility (Matt 18:17).