It is a
really nice cloak.
The cavalier is a tank; his damage output isn't great (although high enough to take out most of the non-warriors in the party with one hit) but his defense is monumental. With an AC of 0, most of the party can't hit him on a roll of anything less than a 20. Just be glad he isn't on a horse, because then he'd be significantly more dangerous with all of his various cavalier abilities.
There are some ways to bypass his overwhelming defense. First, attacks from behind not only grant a +2 to hit, but they ignore his shield bonus. Second, he's wearing plate mail which is highly resistant to slashing attacks. Unfortunately, our two warriors both specialize in slashing weapons (battle axe and long sword), but if you have a bludgeoning or piercing weapon on hand, they have a better chance of getting through.
The best strategy is probably to go with Kynaston's plan; let him keep the cavalier's focus, as he has the best AC of the party, and then everyone else can try to flank him. However, tank that he is, Kynaston still only has 10 HP which means he can probably only survive 2-4 hits or so. If Kynston goes down, it really throws the plan into disarray.
There are a few other techniques the party might try if they are feeling lucky, like the use of called shots. Called shots, however, come with a -4 to hit. So it depends. You might argue the best thing to do is minimize penalties and maximize bonuses as much as possible, so you are more likely to hit and deal damage and try to wear him down. On the other hand, you could also say that since the odds of hitting him are so low, another -4 isn't going to make a difference.
Some examples:
Disarm his weapon - If you make a called shot against the cavalier's weapon (-4 to hit), and succeed, you can knock it out of his hand. This will force him to draw his backup weapon, and reduce his damage output. If you can somehow, by a miracle, then do it a second time, he'll have no weapon at all and be in a really bad spot.
Disarm his shield - You can't make someone drop their shield, but you can 'disable' it for a round by knocking it out of alignment. If successful, he loses his shield bonus until the following round.
Pin his weapon - Another called shot, this is where you use your own weapon or shield to stop your opponent from attacking by pressing against it. Often called a 'sword clash.' This stops your opponent from attacking, although you also cannot attack while doing it. How long it lasts depends on various strength rolls performed by both the attacker and defender.
Tripping - If the cavalier is knocked to the ground, the party would gain attack bonuses (+4) against him until he got back up. However, this is not easy. Even if you succeed in making the called shot, he still gets to make a DEX check to stay on his feet and if he's standing still at the time, he gets a +6 to the roll.
Morale - Not every battle need to be to the death. If you can whittle down his morale enough, the cavalier may surrender or retreat. As an elite knight of 6th level, though, his morale score is pretty high. But if the party can eliminate his allies, outnumber and surround him, and otherwise convince him he isn't going to win this one, the party can attempt to force a morale check by demanding he surrender/escape. If the cavalier makes his check, he'll continue fighting and the party cannot attempt again unless they once again tip the favors in their odds again (i.e., wounding him further, etc.).
Of course, if he escapes, he may return again to seek revenge. And if he surrenders, it brings up the question--what will the party do with him then?
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Haahque made his post while I was making mine, so allow me to address some of his points here.
(he's just 1 level too low to get 3/2 as his base).
Haha, yep. He was going to be level 7 originally, but I realized those extra attacks would make him too powerful, so I knocked him down one level.
Maybe Darga could get lucky and get a back stab in for double damage and a better chance to hit.
Too late now, the cavalier is aware of Darga's presence.
Maybe the illusion hobgoblin caster of doomish doom will startle or scare the knight.
This could certainly work toward damaging his morale, as I said above.
If we distract him long enough to get Daxia untied and wake her up, we should be able to outrun someone in heavy armour, especially at night when it's dark and there's plenty of places to hide.
Agreed, although there will be future consequences if he's left alive, naturally. (Namely that he gets to keep his magnificent cloak.

)