Boo!

One of the things I liked about the 5e playtest materials was the rule for surprise, probably because it almost exactly mirrored the mechanic I had been planning to use for Nutshell Fantasy. Always nice to have your ideas validated.

On the other hand, on reading those same playtest materials, I came up with a better idea.

Firstly, it's perhaps worth a short discussion of what 'surprise' represents in Nutshell Fantasy. See, when people think of surprise, they tend to picture the party calmly going about their business when suddenly an assassin appears out of nowhere and plunges a dagger between their ribs. Which is all well and good, but it doesn't really match the situation under discussion.

See, in Nutshell (and D&D as well), the PCs are adventurers. They spend the bulk of their time travelling through hostile environments, or crawling through dungeons, or similar. Even the towns they call home tend to be hives of scum and villainy.

As a result of this, PCs are very rarely "calmly going about their business". They have to have their wits about them at pretty much all times, because otherwise they are likely to die. And, as such, they're extremely unlikely ever to be surprised in the "dagger in the ribs" style discussed above - that's just not what the "surprise" rules are modelling.

Instead, those rules are modelling something more like the situation in Star Wars, where the heroes turn a corner and come face-to-face with a group of Stormtroopers (who were looking for them, but didn't expect to find them right then). As such, there's a moment of surprise before Han blasts one, shouts "get back to the ship" and runs off. He certainly has courage.

So, the rule for surprise in Nutshell:

If some of the participants in a combat are judged to have surprise, those characters gain advantage on the initiative roll for the combat. Further, if they win initiative, they gain advantage on attack rolls against surprised opponents.

And that's it. Gaining surprise means you will probably (but not certainly) get to act first, and it also means that those first attacks are more likely to succeed (and, in the case of Rogues and similar, trigger Sneak Attack and the like).

Advanced Surprise

However, that does leave the situation above: a character is calmly going about his business when suddenly an assassin appears out of nowhere and sticks a dagger in his ribs. (In a modern context, the character is suddenly gunned down by a sniper half a mile distant.)

This rule only applies in one of two cases: either the attacker is unusually hidden (he literally comes out of nowhere), or the defender is unusually unaware (he's asleep, drugged, or similar, or in a truly 'safe' location). In which case, the attacker gains "advanced surprise".

The rule for advanced surprise in Nutshell:

If some of the participants in a combat are judged to have advanced surprise, they gain an entire free round of actions before initiative is rolled. During this round, they gain advantage on attack rolls against surprised opponents. Then, when initiative is rolled, those characters gain advantage on the initiative roll for the combat. Finally, if they win initiative, they gain advantage on attack rolls against surprised opponents.

Naturally, this means advanced surprise is very nasty. It should also be extremely rare - in almost all cases characters will have their wits about them enough to negate this possibility.

(As noted, the truly 'safe' location does not mean just "walking down the street", at least in the sort of fantasy metropolis that is usually encountered (which is home to all manner of monsters, rogues, and other dangers). However, if the PCs had set up their own home-base - a keep or castle, a command tent for their army, or similar (or, indeed, a Lyrandar airship heading North...), then that would count as a 'safe' location.)