"Ἀδελφοί μου, ἐάν τις ἐν ὑμῖν πλανηθῇ ἀπὸ τῆς ἀληθείας καὶ ἐπιστρέψῃ τις αὐτόν, 20 γινωσκέτω ὅτι ὁ ἐπιστρέψας ἁμαρτωλὸν ἐκ πλάνης ὁδοῦ αὐτοῦ σώσει ψυχὴν αὐτοῦ ἐκ θανάτου καὶ καλύψει πλῆθος ἁμαρτιῶν." James 5:19-20
James concludes this epistle in chapter 5, verses 19 and 20, with a final exhortation which on one hand flows out of the theme of confession and forgiveness of the preceding section and on the other hand gives what must have been the author's purpose in publishing the epistle, i.e. turning people from error.
The address Ἀδελφοί μου, (my brothers) indicates that these two verses are a separate unit, but one cannot look at the formal separation and juxtaposition of traditional theme beside one another without remembering that there is often an internal thematic connection, a reason why the segments are placed where they are, whatever the source, as is apparent in this case.
ἐν ὑμῖν "If someone among you" begins James. (among you could be a semitizing construction, indicating he is thinking of the whole epistle, of the community member who apostatizes, not about missionary involvement among either Jews or gentiles.) The possibility is that this community member might "wander from the truth," πλανηθῇ ἀπὸ τῆς ἀληθείας - which forms the situation under consideration. To wander πλανηθῇ is to apostatize i.e., to reject the revealed will of God and to act contrary to it, either through willfulness or the deceit of others (including demonic powers).
The term "wander" is used in the LXX for transgression of the law, especially idolatry. Satanic influence is generally seen behind these actions. This same sense of rejection of the right way, and wandering into moral corruption (often due to the devil) appears in the NT in numerous places. Thus the seriousness of the problem appears from the first, particularly since morally corrupt behaviour was neither accepted nor glossed over in the early church, but exposed and rejected.
The wandering is "from the truth." ἀπὸ τῆς ἀληθείας. Truth is a way to go, a way of life in Judaism as in the NT. That it is this sense of truth which is intended becomes clear in the next verse where the way ὁδοῦ becomes the parallel idea ἐκ πλάνης ὁδοῦ αὐτοῦ - for the "way" of a person is not simply his thoughts, but his lifestyle or conduct.
Thus to be turned - ἐκ πλάνης ὁδοῦ -is to be turned -ἐπιστρέψας, from a wrong way of life, an error in life-style. The person must be turned from the wrong way to the right one, from falsehood to error. those in the community who have erred from the truth or are in error with respect to their lifestyle are those disregarding the norms of the community and are in need of someone to bring them back, to turn them ἐπιστρέψῃ τις αὐτόν. This about face is well known in the OT and the NT, as is the desire (or command) to motivate others to turn. The promise that James is making is to those in the community who see the person in error and in proper meekness and humility attempt to turn him back to the narrow way, the true way of the community. In other words away from sin, ἁμαρτωλὸν.
Such a Christian should remember or become aware of the teaching of the church on such matters - γινωσκέτω This is an exhortation to be fully aware and act on what one has already heard. This teaching is that such an action will bring another to repentance - restoring him to the community "will save his soul from death and cover a multitude of sins." σώσει ψυχὴν αὐτοῦ ἐκ θανάτου καὶ καλύψει πλῆθος ἁμαρτιῶν. The concept of saving a soul from death is clear enough, for death is plainly the final result of sin, usually thought of as eternal death or the last judgement.
That sin can result in physical death is also clear, (1 Cor. 15:30) as well as many OT passages. This may be part of James' meaning but the tone appears to go beyond physical death and recognize death as an eschatological entity, at least here one dies in sin. It is the soul - i.e. the whole person which is liable for death. It is probable that one should read "his soul" ψυχὴν αὐτοῦ -not simply "a soul"or "a soul from death itself." ψυχὴν αὐτοῦ ἐκ θανάτου.
Parallel to saving the person from death is the idea of covering of a multitude of sins. (καλύψει πλῆθος ἁμαρτιῶν) To cover sins is to procure forgiveness. The idea of "a multitude of sins" serves to describe not the state of the sinner, but the extent of the forgiveness. The expression "covers a multitude of sins" is found in Prov. 10:13, and quoted in 1 Peter 4:8, and the early church fathers. It is possible James is dependent for his expression on the Jewish Christian tradition that contained that phrase (but not the LXX, which is not at all similar!) The idea might have been the erasing of sins from the record on the heavenly tablets, but while in harmony with the apocalyptic vision of James, an image of forgiving sins and making atonement for sins.
Whose soul is saved? It is either the person turning others to forgiveness and salvation, or the sinner themselves. As James has already expressed parallels ideas in parallel phrases, he may be implying both! The most likely antecedent, αὐτοῦ, is the sinner (the αὐτοῦ with ψυχὴν referring to the αὐτοῦ with ὁδοῦ) and thus both phrases probably refer to [FONT=Helvetica Neue, Verdana, Helvetica, Arial, sans-serif]forgiveness: he is saved from destruction and freed of his sins through repentance.
James then concludes with the purpose of his work. He does not discuss sins simply to moralize or condemn. He discusses sin to point out to erring community members the results of their behaviour and to bring them to repentance. He hopes to save them from damnation and procure forgiveness of sins. It is this apostolic goal he urges on his readers, and having encouraged them, to follow in his steps and take up where he ends.*
James places in these two verses, or one sentence two responsibilities: to teach and practice a biblical model of Christian community and to balance discipline with mercy.
Rather than viewing these verses in terms of a hypothetical person headed for damnation, this passage is in fact a call for discipleship and obedience to the vision and hope of Jesus. Forgiveness is the goal, and discipline the method. Discipline here, includes a strong need to exhort and to correct, while supporting and extending mercy and grace. It is certainly true that the case of an unrepentant sinner is serious, because righteousness must be taken seriously! This one who wanders needs to become the object of reconciliation in the church. His or her sin has placed them outside the community of the church. Jesus and James both argue that the entire community of faith must be about this task and make the relevant decisions. (Matt. 18:17-19)
The teaching of James throughout his letter is often harsh and even rigid. But then, so was the mandate given by Jesus. But here, in the last two verses of his letter, James allows a note of grace. Forgiveness must be offered, but it must be balanced with a faith that is active, faith that has captured mind, body and heart.
Jesus calls us to recognize sin and to forgive the sinner with a warm welcome. To fail at the first, is to take sin too lightly. To excuse sin, whether as a harmless quirk or a lifestyle choice is to deny both the seriousness of the offence and the responsibility of the offender. James offers the sternest warning: The result of sin is death! To fail at the second, however, is to fall prey to sterile doctrine and to miss the forgiving part of Jesus ministry and his unconditional love. We need both!
This tension between righteousness and mercy is a difficult one, but one we must heed. In conclusion, George Caird said,
"To follow Jesus or to follow his example turns out to be, as popular tradition has held, the higher road, that particular morality which the gospel imposes on Christians. But such morality does not consist of conformity to any stereotyped pattern, it consists rather in learning from Jesus an attitude of mind which comprises sensitivity to the presence of God and to the will of God which is the only authority, a constant submission of personal interest to the pursuit of that will in the well-being of others, and a confidence that, whatever the immediate consequences may appear to be, the outcome can be left in God's hands."
*Peter H. Davids The New International Greek Testament Commentary: The Epistle of James NIGTC pgs 198-201.
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a bit better than I do maybe can shed some light on this. 
