Forgiveness encompasses both law and gospel.
Law because we are commanded to forgive others as we are forgiven. Law because we are commanded to have a kind and forgiving heart, even when others don't reciprocate.
Gospel because we are freely forgiven for Christ's sake. Gospel because our sins, though many, are not counted against us when we are joined to Christ.
One of the beautiful things to watch is when a Christian has incorporated that forgiveness into their lives so that forgiveness starts to come almost naturally. In other words, while the Christian knows he is commanded to forgive others, his forgiveness is not just a matter of gritting his teeth and doing what God has commanded, but he forgives just because God has made forgiveness a part of that Christian's being.
In today's gospel read (from Luke 17), the English Standard Version translates the last phrase of 17.4 as "you must forgive him."
In 17.4, our Lord is telling us that if our brother sins against us, we are to forgive him.
The Greek word there, "must," is better translated "shall" in English. We don't use "shall" a lot these days, but it's one of those words that conveys a subtle meaning, such as if I said, "If I drop you off a mountain, you shall fall to the ground." Shall meaning, "it's going to happen, whether you want it or not."
In other words, I think our Lord is giving us a gospel sense of forgiveness. "If your brothers sins against you, you're naturally going to forgive him because you have been forgiven." "Must" (in the ESV) puts a law twist on it, so that this is something you have to do.
You are freely forgiven for Christ's sake. When we are given the grace to treasure that forgiveness, our brother's wrongs against us pale in comparison, and our forgiving him -- though it's certainly commanded by God -- becomes a light and easy burden to bear.