Whether it’s a judge in court or just between people, it is important to consider the background and inner life of the person, to think about all the circumstances surrounding this individuals life, and to reflect on the reasons why this person was led to this action. Only then, the conclusion is truthful.
However, there is another layer to this. When you judge another person in a good light, you are really doing the same for yourself.
When we judge others, we are setting our own personal justice system. If I am constantly finding fault and criticizing others, I send a message to G-d. Shortcomings should be noticed and highlighted; there's no room for mercy and tolerance. G-d allows us to fashion the very justice system with which He views us. If we see only the bad in others, we bring upon ourselves the very judgment which we, in our minds, visit upon others daily.
Especially when times are tough, it becomes even more important to follow this tenet and be sympathetic to each other so we will judge kindly. This doesn’t mean you can’t criticize bad behavior. What this means is that you should give him the benefit of the doubt. Don’t be accusatory and sharp.
The Talmud teaches us further: "Anyone who judges others favorably will be judged favorably in Heaven". This follows the general principle that G-d rewards and punishes us "measure for measure". If we are patient and understanding with others, G-d will act in the same manner towards us. If not, G-d will get his cues, so to speak, from our own behavior. Sadly, G-d's method of judgment is only too just.
The Mishna says – G-d punishes a person knowingly and unknowingly. From time to time, G-d puts people in a situation where they pass judgment on someone else without knowing that it is really a judgment on themselves. Sometimes, it will be a positive judgment for doing good, and sometimes it’s a negative occurrence which he passes a negative verdict.
Someone who justifies a harshness and difficulty on another person, and is not pained by the hardships and doesn’t pray for them, brings accusations against himself, and Heaven starts looking into his own affairs. While someone who empathizes in another’s difficulty, will be rewarded.
There is a further point to all of this. When we put a positive spin on someone’s actions, this actually helps that individual to bring out the good and help him overcome the challenges he is facing. Accentuating the positive, however much, or little, draws more of it out, and this helps eliminate the bad and negative that is currently there.