A brief summary of some house rules I’ve used for 1914:
A common scenario is for the UK and German fleets to face each other over the north sea behind their own minefield protection.
Neither side is encouraged to attack because even if they win, they’ll be left in “enemy” waters and separated from any new ships they build and place at the end of their own turn. However historically accurate, this does not often make for exciting naval combat.
But if we allow the attacker to withdraw (retreat from victory) even if he sinks the enemy fleet, he can make an aggressive move knowing that at the end of the battle he can still return to “home” port and be reinforced with new units. This should apply even if the enemy has retreated his own fleet; i.e. the defender cannot “lure” the attacker into a trap by retreating his fleet and then attacking him in turn with the enemy ships damaged and without protection.
To re-balance, I allow a player to “pursue” a retreating fleet, though this of course may mean running the gauntlet of enemy mines if he has retreated to a friendly port.
This game of “tit-for-tat” can go on for as many turns as the players want until one fleet is destroyed or someone declines the chance to pursue.
If the attacker wins a round outright he can withdraw some of his ships while leaving others to patrol the fought over SZ, but if someone retreats from an active battle it must be with his entire surviving force.
An attacker can even end up with ships in 3 different SZs; i.e. A attacks B; B retreats; A sends some ships to pursue, leaves some to occupy the original target SZ, and withdraws a damaged BB back to home port for repairs.
Theoretically a sea battle can go on indefinitely, with the sequence of attack-retreat-pursuit seeing rival fleets zig-zagging across the map, especially if they are on the open ocean far from friendly ports.
This does raise the issue of extra movement, but remember that either side can end the combat by declining to pursue or by fighting to the death rather than give the enemy an advantageous extra move.
Some may prefer that defending ships should be allowed to retreat only into friendly ports or to SZs with friendly ships already in them.