Okay, here's what happened!
The halfling was saved by the priest of Kord and taken into custody by the paladin and the other PCs.
I decided on several consequences for the paladin's actions:
1) The paladin had a celestial "advisor", a leonal who he (and only he) could see and/or talk to. This advisor was replaced by an inevitable with the mission of aiding the paladin in the interpretation and application of the laws of Hieroneous and the mortal realms.
2) The paladin was ordered to place the halfling on trial, with the paladin as judge. (The King's priests received a vision, and the King issued a decree granting the paladin special jurisdiction for the trial.)
Other consequence are not yet known -- spoiler text follows. Players, stay out!
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3) All of the paladin's spells and abilities that relate to evil (Protection from Evil spells, smiting, etc.) now apply to Chaotic creatures instead. This will be a serious issue as the main campaign enemies are Lawful Evil...
4) When the paladin feels he is ready, he may seek atonement to clear the stain on his soul. The nature of that atonement is not known.
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The paladin acted very appropriately during this session: he confessed his actions to a high priest of Hieroneous, sought guidance, and was genuinely upset and confused over what he had done. A good RP session.
Unsurprisingly, the thought of adminstering laws was met with less than utter enthusiasm, confirming that this was a proper consequence for his actions. The paladin has a lot of work ahead of him -- but it will be fertile ground for roleplaying, and should improve rather than detract from the game.
Thanks to everyone who posted advice -- it was very helpful!