In such cases, the judge basically has to listen to each player's explanation and make a judgment as to who is more likely to be telling the truth.
In this case, the UW player is clearly caught with the Batterskull in hand which was sent to the bottom of the library just the last turn, with the only shuffle of his deck being the one where he scooped it into his hand. A judge would be easily able to determine it in this case.
It reminds me of something that happened in GP Manila a couple of weekends ago. One guy had accused his opponent of drawing extra cards and the head judge had to intervene to straighten things out. The head judge basically managed to count every single card the guy had drawn since the start of the game and proved conclusively that the other guy had drawn at least one extra card. The onlookers were very impressed.