For many Protestants, especially those within the Reformed camp, the δικαι-word group are declarative, not transformative in their meaning. For a thorough refutation of this contention, see Chris Vanlandingham’s book, Judgment and Justification in Early Judaism and the Apostle Paul, a work that also thoroughly refutes Sola Fide and other false theologies.
That δικαιοω can and does have a transformative, not just a declarative, meaning, can be seen in many passages. For instance, notice Psa 73:13 (LXX 72:13):
Verily I have cleansed (δικαιοω) my heart in vain, and washed my hands in innocency.
Similarly, the Hebrew term “to justify” (צדק), which is the word usually translated with δικαιοω in the LXX, can also mean “purify”:
And he said unto me, Unto two thousand and three hundred days; then shall the sanctuary be cleansed (צדק).
As Derek Flood, in his book, Healing the Gospel: A Radical Vision for Grace, Justice, and the Cross (Eugene, Oreg.: Cascade Books, 2012), pp. 103-104 notes:
Even where dikaioo appears to mean “declare righteous” linguistically in Romans, I would argue that it nevertheless always includes the restorative sense of God making-righteous the unrighteous in Paul’s thought. We can see this connection explicitly drawn out in Romans 5 where Paul juxtaposes two parallel formulations:
Consequently, just as one trespass resulted in condemnation for all people, so also one righteous act resulted in justification (dikaoisis) and life for all people. (v.18)
For just as through the disobedience of the one man the many were made sinners, so also through the obedience of the one man the many will be made righteous. (v. 19)
Here we can see that, whatever Paul understands dikaioo to mean, he directly connotes that meaning with our being “made righteous” in this parallel verse. The NET renders the Greek dikaiosin zoes (literally “the making right of/from life”) as “righteousness leading to life” (v. 18). Justification is an act of God that results in life because it “makes righteous.”
When Paul says that “God justifies the ungodly,” he is not proposing [that] God is a participant in the kind of legal fiction that the Old Testament expressly condemns [Isa 5:23; Exo 23:7]. Indeed, one of Pau’s central points in Romans is to demonstrate that God was not unjust in showing mercy to sinners rather than punishing them. The way that God demonstrates justice is not by acquitting the unrighteous, but by making them good. It is a gospel of God’s act of restorative justice in us. God’s actions are life-giving and transforming.