It's a nightmare scenario I've come up against a million times and I've very rarely seen it dealt well. Bullies don't always stop bullying when disciplined for it, they just stop for a bit and change tactics.

It's hard to advise cos it depends how many people are involved, who us being harmed, who would give evidence to management etc about it, tactics being used etc. Best i can say is balance these factors up versus moving on, which at least gets you out the situation