I tutor for a certain grammar school which has an interesting way of addressing this.
They set the pass for their VR paper. If the children get over this, they are in.
If they are under this but above a score about 10 points less than the pass, they then look at the maths and English paper the children also did at the same time. They then offer more places based on this and also organise their waiting list based on these papers rather than VR. In a way this is like looking at their schoolwork.
In Surrey back in the mists of time, it used to be more than 10% - at least 25% of places were allocated to those who didn't pass - there was a panel of senior staff from the local grammars who looked at their school work and also interviewed the children. They actually also saw the ones who had passed, but couldn't 'un-select' them on grounds of messy, untidy work (luckily for me).
Still feel that it's a fairer way of doing things, but as it isn't a clear 'yes/no' exam method, would be subject to even more arguments at appeal.