Fortuk: What determines when characters die in arena mode? Does each one of them have a set number of times that they can be defeated or is it something else? I've mostly been winning with only the occasional overconfident loss and I try to pick recruits with full health as much as possible, but they still keep dying. It makes reaching higher tiers a bit frustrating as levelling skills takes so long, though it could be that I overlooked something as I haven't read all the instructions.
If you look at the health bar there are two colors on it: yellow and red. Yellow is your stamina and red is your permanent health. Stamina will slowly increase on it's own if you aren't engaged in combat. Red health will increase a slight amount (~10% or so) after each match ends. If you lose all of your stamina then you're knocked out. If you lose all of your permanent red health your character is killed permanently.
If a recruit or hireling dies in the arena you keep all of their gear (it'll show up in the arsenal screen). If your main character (the manager) dies then it's game over in the arena. Cycling between different characters is a good way to gain health for all of your fighters since everyone gains a slight amount of health after each match. Eventually there will be a healer NPC added to the arena hub which you can pay to speed up the healing process.
Wearing armor greatly reduces the risk of taking permanent red damage. Usually if a body part is armored you'll only take stamina damage unless you receive a very hard blow to that area. Stacking armor on top of each other is also good practice to further reduce the chance of permanent damage (for example: wearing a padded cloth gambeson underneath chain).