Yeah I believe that is the correct formula NW. In law mode..
Damage = Attackers Attack Stat / (Attackers Attack+Defenders Defence) *125...
Paladin versus Lion... 50/(50+40)*125=69.
..add the attackers attack stat and the defenders defence stat together (paladin 50 att+lion 40 def = 90), you then divide the attackers attack stat (paladin 50) by this number (50/90 = 0.55), now multiply that number by the 125 damage formula (0.55*125 = 69.4) ...the attack will do 69 damage to 100 HP.
..for the same attack in chaos mode (using 100 instead of 125), the % chance to kill would be 56% (0.55*100=55.55, rounded up to 56)
The reason the damage formula is multiplied by 125 in law mode (instead of 100, like in chaos mode) is so that a 4 to 1 attack ratio = a one shot kill.. With 100 as the damage formula you wouldn't be able to one shot kill weak creatures (e.g rats).