Here is an essay which appeared on another forum a few years back. It is short, but interesting.
Disfellowshipping
Disfellowshipping! Wow, finally one of my hot-button issues! Since you asked for scriptural references as well Galileo, let me see what I can do for you.
Since sound doctrine must be compatible with the whole Bible, let's take a little look at how things were handled under the Jewish system. First off, Israel was a sovereign nation, which means that it had a law code with criminal penalties, including capital punishment. How matters were adjudicated reveals much about our god and, consequently, how he wants his servants to handle matters of wrong doing.
Under the Mosaic Law, all matters were adjudicated openly, for all the people to see. So much was this so, that one of the principle objections that Jewish leaders have today to the Gospel stories of the trial of Jesus is that the secretive nature of his trial, as recorded in the Gospel, was impossible under Jewish law and could not have possibly taken place that way. Trials usually took place at the city gates with the older men of the city sitting in judgment (De. 21:19-21.). The book of Ruth confirms that legal disputes were handled in that manner (4:1.). Two or more witnesses were required to establish guilt (Nu. 35:30, De. 17:6.). So, as we can see, everything was open and above board.
By the time of Christ, the Jews had added expulsion, or disfellowshipping, to their justice toolbox. It would appear that the Romans had placed certain restrictions on the religious leaders to invoke capital punishment for some offenses that merited it under the Mosaic Law (Joh. 18:31). As a number of studies by social scientists have confirmed, expulsion from a group is a potent punishment that can have lasting consequences. So it would appear that the Jewish leaders had found a powerful weapon to use to insure conformity. The Bible has an example of expulsion being invoked in the case of a man who spoke well of Jesus (Joh 9:8-34.). As you read that, please note that the trial of the man was conducted publicly, as required by Jewish Law, even if the judgment and punishment were unjust.
So what about the Christian congregation? How did they do it in the first century? It would appear that they adopted the Jewish penalty of expulsion for certain cases. How was it done? Well, we know that in several cases The Apostle Paul ordered it done himself (1Cor. 5:5, 11; 1Tim 1:19-20.). Since Paul was led by Holy Spirit in his actions, we can assume that he had the authority to do so. Note here as well, that Paul was open about what he did. We have recorded for all time just why he ordered the expulsions. It can't get more public than that!
Paul also chided the congregation of Corinth for not having judged and expelled the malefactor themselves (1 Cor. 5:12:13). As late as the beginning of the second century, it appears that expulsion was still practiced by the Christian congregation since John mentions an abuse of the authority (3 Joh. 9-10.). The standard of two or three witnesses still applied (1 Tim 5:19-20.). Apparently all things were done open and above board the same as had been required of Israel.
In modern times, expulsion has been used from the beginning. Under Russell, expulsion was only invoked for those who practiced (not guilty of one or two acts) the things for which the Bible clearly mandates such an extreme action. The trail was apparently conducted in front of the whole congregation with them involved in the decision. And , to this day, that is how I understand the Bible Students to handle the matter (If I am wrong, I will welcome correction in the matter.).
After Russell's death, things changed. Presently, judicial matters are handled by Star Chambers. Three elders meet secretly, interview the accused and the witnesses separately, and make their decision in secret. They are guided by a manual that they will usually refuse to allow defendants access to in making their decisions. And I am not at all impressed with the arraignment.
I've personally been involved with several hearings. On one occasion, a witness was DF'd on the strength of rumors of wrong doing. In another, a rape victim was DF'd despite denials that the intercourse was consensual. These defendants were never allowed to confront any of the witnesses against them. (So much for the "two witnesses" rule that the society proclaims to the world to be sacrosanct.) And in one case, the defendant was not even informed of the decision, or right to appeal it, before the decision was announced to the congregation! To say that many of these star chamber tribunals are rife with corruption, I think, is an understatement.
You asked! So there it is.