If you consider someone a friend would allow people to trash talk them? And if you do what is your definitely of a friend and does it include loyalty?

I'm not going to participate. That's first. Certainly show my dismay non verbally. That's second. Speak my disappointment about them talking shit behind someone back. That's third. If at any time I come under attack I'll apologize for my ignorance and withdraw from the discussion.

Then, after I hear them out. I may later ask them not to continue talking about a person behind their back. Promise to investigate or address the matter. And do do tactfully with the subject under scrutiny diplomatically as I can.

Perhaps then, if it's something important I'll decide who to cut ties with.