While much of the current discussion regarding justification is indeed rooted in differing understandings of what Scripture teaches, much of the confusion could perhaps be cleared away as we are increasingly conscientious of the prepositions we use. I suggest the following. These are nothing new--just reminders.
Justification is BY MEANS OF (dia) faith. (Rom. 3:22,25,26)
Justification is ON THE BASIS OF (epi) Christ's atoning work. (Rom. 3:24-25)
Judgment is ACCORDING TO (kata) works. (Rom. 2:6-11)
1) Justification is not on the basis of faith: if it were, faith would then tragically become a new "work" by which a human earns justification. Justification is by means of faith: faith is that which accesses an utterly freely given, unearned declaration of permanent and irrevocable righteousness. Faith is not something I must muster up (inside myself); it is itself simply the impulse to look outside oneself. I say it would be tragic to see faith as the basis of justification for three reasons. First, even faith itself is a gift (Eph. 2:8-9). Second, such a view of faith as a work would create perpetual anxiety as to whether one's faith was adequate to truly justify, whereas the very meaning and genius of faith is that it allows one to look to something outside oneself for this approval. Third, and most importantly, seeing faith as a work detracts from the beauty of God's grace as one claims credit as a co-conspirator in one's salvation (Eph. 1:6,12,14).
2) Justification is not by means of Christ's atoning work: if it were, it would be impossible for one to know whether one was included in God's justifying grace (indeed, would it be impossible to be included in that grace?). Justification is on the basis of Christ's work, and is accessed by faith. Faith is the bridge God builds from my heart to Christ's work.
3) Judgment is according to works, not on the basis of works. That is, there is congruity between how we will be judged and what kind of life we have lived, but it is not a causal relationship.
4) Judgment, not justification, is according to works. Justification has everything to do with works and nothing to do with works--everything with regard to Christ's works (both a righteous life and a condemned death), nothing with regard to our works. This is not antinomianism, because I do not say salvation has nothing to do with works, but justification--that instantaneous event in which God declares a sinner who is void of any moral merit permanently and irrevocably innocent (negatively) and righteous (positively). Salvation, under which justification is subsumed, is indeed interested in works (a la James 2:14-26). Salvation is not salvation if unaccompanied by a changed life. Yet the proper way to frame this is not by saying justification is according to works. Justification is that part of salvation that is not in any way related to human works (except to say that it excludes them!). Judgment is according to works: at the final day when God judges every person, that judgment will be congruous with the manner in which we have lived our lives. But while a life of obedience inevitably follows justification (by vitue of one's union with Christ [Rom. 6:1-23] in which one's internal spiritual makeup is revolutionized and one's desires turned upside down), it is not in any way tied up with justification.
The reason it is so crucial we get justification right is that if we don't, two disastrous results will follow:
1) God in Christ will be robbed of the glorious beauty of his completely benevolent grace
2) You and I will be robbed of assurance that God has put us at rights with him entirely apart from anything we bring to the deal, except for our need
I write these things so that you and I will love Christ more desperately. If we do not--if instead we feel more prideful in our own successful theological articulation or in someone else's failed articulation--then we have utterly missed the point of theology. Theology is not for argument, ultimately. It is for doxology. It is to be argued, oh yes!--so that it can be rightly enjoyed.
And can it be that I should gain
An interest in the Savior's blood?
Died he for me, who caused his shame
For me who him to death pursued;
Amazing love, how can it be,
That thou, My God, shouldst die for me.
No condemnation now I dread;
Jesus and all in him, is mine;
Alive in him, my living head,
And clothed in righteousness divine
Bold I approach th' eternal throne
And claim the crown, through Christ my own!