Some time ago I thought I would put together some horror rules for Operation Squad (sorry Agis!). Never came off but here are my thoughts. I would give everybody a fear level, let's say 4 on a D6. Every horrific creature has a fear factor, say 1,2 or 3. When a horrific creature charges or when a model wants to charge a horrific creature, roll dice equal to the fear factor. 1 fail is nervous/shaken (fights with penalty), 2 fails is panic (may not close, fights at penalty), 3 fails is run away!
Monster hunters can be given levels which ignore 1,2 or 3 fails.
Obviously the numbers and die type can be adjusted to suit.
John