I've got a news flash for you. It's not a player problem, it's a DM problem. If the DM is allowing this guy to reap the rewards for that kind of behavior, he's failing. The issue is, you really can't force the DM to do anything. So, here're my solutions:
1. You're playing a paladin. The next battle you get into where a Pc or NPC (say a villager you're trying to save) is slain, or greiviously wounded, judge that his cowardice in the face of battle contributed to their demise. In light of your judgment, ask his defense for his actions. Make a street trial. If the rest of the party gangs up on you, you know it's time you got another group, or as has been suggested, make a new character for that group. IF on the other hand the player dismisses you or refuses to entertain the idea, announce judgement as guilty and follow that with a sentence of death. Then attack.
2. Get another group
3. get another DM for your group
4. Get another character and use it to screw his over. A rogue with sticky fingers perhaps. Take back some of his not hard earned treasure.
5. Start your own campaign and invite everyone to play in it. Then YOU can decide what behavior is worthy of reward or punishment.
good luck