Each player in a party have the same chance of getting loot. This is fair except when someone doesn't contribute. My suggestion is that players that attack a monster either: Only they can get the material if it is dropped.
OR
There chances of getting the material increases.
I think the second one is more fair then the first even though I prefer the first one.
This basically for AFK people.
If you have someone not contributing, kick them from the party. Problem solved.