To explain it a little better, the Baal Shem Tov says that HaShem never passes judgment on you unless both the whole world and you agree with that judgment. How does this work? He puts someone in front of you that acts in the same way that you yourself acted and you pass judgment on this person, you are then held accountable for your own actions in keeping with your own judgment of them. [see this earlier post for more detail]
In my attempt to explain this mechanism a little, I connected it to the testament brought down by the Komarna Rebbe in the Notzer Hesed, that anything bad you have ever heard about another Jew is complete and total baseless lie without any part of truth. [see this earlier post for more details on this and on its connection to the above]
Basically, the way I understand it is like so: The judgment is essentially automatic. The world is such that there is Truth, and there are the powers that conceal the Truth, 'the powers that lie.' The powers that lie are given dominion only over those that willingly give 'the powers that lie' dominion over themselves. How does one put themselves under the auspices of 'the powers that lie?' by believing in the lies.
If we look at it from a certain perspective, we can see how all of Bnei Yisrael are tzaddikim, (just as Chazal say) and when we look around, we see all manner of lies trying to convince us of the lack in one Jew or another. (But, just as Chazal tell us, if we see a Tzaddik sin, we need to believe that they did teshuvah that same day.) These lies themselves are results of our own misdeeds and they blind us from seeing the reality. If we then believe what we see, and believe the lie, then it gains power over us to cut us off from HaShem (chas v'shalom) in that exact way that we believed that other Jew was disconnected from HaShem. (chas v'shalom)
In this way sinning is a two-stage process, there is the act of sinning itself, of which Chazal say "no one sins except because a spirit of foolishness entered him." The act itself is a test from HaShem. Then the real test of the sin is whether this sin which has been given a limited dominion over us, to corrupt our perception and believe another Tzaddik is guilty of that sin,
will be believed, in which case we truly seal our own fate.
If instead we are able to ignore that bad, deny its existence in others and instead find their good points, then HaShem is willing to overlook our own failings. Still we have the matter of Teshuvah, which will help us to rectify our perception until we no longer even see lies in the actions of others, until we don't even suspect another Jew. The recognition of the reality of what we see itself is a powerful force to encourage our teshuvah, when we realize that the Jews around us are all tzaddikim, and the lies before our eyes reflect only our own failings, we will call out to HaShem that he save us from our own limitations, and we will long to be like our fellow Jews, as holy and pure as they.