I responded to the qualified immunity bit, but qualified immunity is actually somewhat of a red herring. It certainly does need to be eliminated, but it is not the main problem. In fact the focus on it smells a bit like the common pattern of hoping that occasional extreme penalties on individuals will reform a situation that has poor diffuse incentives.

The main problem is extending blanket sovereign immunity to these actions/positions in the first place. Let's say someone is arrested, even on a good faith suspicion of a bona fide crime, and is then later acquitted or the charges are dropped. From the victim's perspective, what has actually taken place is a kidnapping and false imprisonment. But the current framework just writes off what happened to them as collateral damage, leaving the unlucky individual to fully suffer it. What has actually happened is that they've suffered an externality of policing, for which they should be reimbursed for, with the damages rolled into the overall police budget so that it reflects the true cost of the police department.

Right now these externalities are being covered by a perverse reverse lottery of unlucky citizens, and that is not right. Reform this perverse incentive and correctly attribute blame (economic blame, at least), and many other incentives will fall out from that.