Never went with if miss by 4 you hit the target.
Unless I'm reading the rule wrong (pg. 24 DMG), the second half of it is screwy and bad game mechanics. The first part about cover, I think, is simple and easy to use.
Instead of what I use above, maybe this would work better, easier.
If you're throwing into melee (Frank is fighting an Orc), resolve the attack as if you were throwing at your while not in melee.
But, count a success only if the attack throw is 4 points higher than what is normally needed.
If the attack throw is at least 4 points higher, then you hit your target (the Orc).
If the attack throw hits but is not 4 points higher, then you may have hit someone else in the melee. Simply compare your attack throw to the AC of the other combatant to see if a hit is scored. Randomly roll for the secondary target if more than two combatants participates in the melee.
This sounds more complicated than it is, so I'll give you an example.
Frank (AC 15) is fighting an Orc (AC 12), and you are throwing a javelin at the Orc as the Orc fights your buddy Frank in melee.
You throw, and your attack is a total of 9. You miss everybody because we're looking for a 12+ (what you need to hit the Orc).
Next round, you throw, and you score a 13. You have to roll 4 points above the target number to hit the Orc (that's the -4 penalty), but you may have hit Frank. A quick check shows that your roll of 13 does not hit Frank's AC 15, thus we move on. Nobody hit.
Third round, you pick up yet another javelin and throw again at the
Orc. This time, you roll a 19. The Orc's AC is 12, and you need to roll 4 points over that to hit him. You did, so you finally hit the Orc.
But, the Orc doesn't die. Fourth round, you pick up your last javelin and toss it into the melee. You score a 15. You need 4 points over the Orc's AC 12 to hit the Orc, which is a 16+. You don't hit the Orc, but you may have hit Frank. You compare your roll, a 15, to Frank's AC 15, and you see that you do, indeed, hit Frank this last time.
EDIT: Upon review this, I don't like it.
What's easiest, I think, is to just roll a second attack against Frank if the Orc is missed.
You shoot and you hit. But, if you miss, you have a chance to hit Frank.
Maybe use a negative...or don't use all your bonuses, because you're not trying to hit Frank? You're aiming somewhere else.
Or...we go back to my original, flat 20% chance that Frank is hit if the Orc is missed.
Still thinking...but I think I like that original idea right now.
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