Divine justice depends on our conduct

במדרש ואלה המשפטים אשר תשים לפניהם.

In the Midrash on "And these are the ordinances which you shall set before them" (Shemos 21:1).

The Sefas Emes opens with the pasuk that introduces the mishpatim (civil laws) that Bnei Yisrael are to place before them.

כי השי"ת רוצה לעשות משפט ונקמה ברשעים כאשר באמת בנ"י זוכין במשפט.

For Hashem desires to carry out judgment and retribution against the wicked, when Bnei Yisrael are in truth found righteous in judgment.

Hashem wishes to bring justice upon the wicked, but this can only happen when Bnei Yisrael themselves stand vindicated under the strict standard of din (judgment).

רק שזה תלוי בעבודת בני ישראל אם הולכין במשפט אמת בכל דבר.

But this depends on the avodah of Bnei Yisrael, whether they conduct themselves with true justice in every matter.

Whether Hashem can act in strict justice against the wicked hinges on whether Bnei Yisrael themselves live by truthful mishpat in all their dealings.

ואם השי"ת צריך לעשות עמנו לפנים משורת הדין אין יכול לעשות משפט ברשעים.

And if Hashem must deal with us beyond the strict letter of the law (lifnim mishuras hadin), He cannot carry out judgment against the wicked.

When we ourselves require Hashem's mercy and forbearance because we fall short of strict justice, that same leniency prevents din from being exacted upon the wicked.

וז"ש אשר תשים לפניהם כי משפט השי"ת תלוי בעבודת בנ"י כנ"ל:

And this is the meaning of "which you shall set before them," for Hashem's judgment depends on the avodah of Bnei Yisrael, as explained above.

"You shall set before them" hints that the very enactment of divine justice is placed in Bnei Yisrael's hands — it rests upon their own faithful conduct of mishpat.

Summary: Hashem's ability to bring strict justice and retribution upon the wicked depends entirely on Bnei Yisrael conducting themselves with true mishpat; when we ourselves need to be judged beyond the letter of the law, that same mercy stays Hashem's hand from the wicked.