As far as I know, you drive around, either choosing to obey the laws or not. If you speed or do something else against the law, and a cop sees you, the cop will instruct you to stop. If you stop, the officer pulls up next to you, and issues you a sentence, either spectating or time in the "Jail" for your offences. If you decide not to stop, and run, the cop will give chase, first just chasing you, then if necissary, using force. You are not allowed to pit during chases, if you crash, you are caught, and given a scentence, usually longer than the one you would have recieved had you stopped in the first place. If the cop crashes, you get away, and can continue driving.
Driving on the wrong side of the road, deliberately hitting other traffic cars, and deliberately obstructing traffic will usually get you kicked from the server. This is a little more lenient during chases, as it's much easier to hit other cars and driving on the wrong side of the road is sometimes your only choice.
I'm not the owner of the server, but these are the rules as I see them, feel free to correct me if I'm wrong.