I have been on to a member of the development team and this will be resolved. There are two potential solutions, one of which will be implemented on the next update.
The cross over between the two will be removed, or the League members will not be able to play against each other.
One third potential solution is a combination of them both. There will be no more cross over between Ladder and Challenge matches, and Members from the same league will not longer be matched in any competitive game.
I will lock this thread now and post once I have received confirmation on the method of resolution.