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After a character dies and respawns they are given a 15 minute debuff which reduces their total wounds by 10%. This debuff stacks and refreshes each time you die, so if you are killed again within 15 mins of dying your wounds will be reduced by 20% for the next 15 minutes, then 30%, and so on.
When killed by another player character the effect is the same, but the time duration is reduced to 3 minutes.
You can visit NPC healers found in warcamps and in towns to spend a very small amount of regular currency to purge the debuff from yourself. The Healer can be marked on the map as a small green cross and is usually found near the respawn point.