What to do if…
a client disputes completed work and stops payment while deadlines are still approaching

What to do now

1. Freeze the moving parts (10 minutes).
   Stop new work and stop informal back-and-forth. Make a single place to track: contract/SOW, change requests, emails/messages, versions, approvals, meeting notes, invoices, payment terms, and exactly what you delivered.

2. Check the contract for acceptance, disputes, and suspension rights.
   Look for: sign-off/acceptance steps, time to raise issues (if any), change-control wording, dispute resolution, and whether you can suspend work for non-payment. If the contract is thin, pull together what was agreed in writing (quote/estimate/email).

3. Send a “dispute clarification + deadline impact” message (today).
   Keep it short and structured:

   • what was delivered (with links/attachments and dates)
   • what was previously approved/confirmed (quote the message)
   • request a written, itemised list of issues and how they differ from the agreed scope
   • ask whether they dispute all of the invoice or only part
   • state your immediate position: work is paused until (a) the undisputed amount is paid and (b) the disputed items and acceptance criteria are defined
   • state the consequence: deadlines move because work is paused (give the earliest realistic next-delivery date)

4. Ask for the “undisputed amount” to be paid immediately.
   If they say “we’re withholding payment,” ask them to pay what’s not in dispute now and put the rest into a punch list with due dates and clear acceptance criteria.

5. Lock in proof of completion (today).
   Export or screenshot: delivery messages, shared-drive upload logs, repository commits, ticket closures, approvals, and any client feedback acknowledging completion. Save a clean copy of what you delivered (exact files/versions).

6. Make a clear stop/go call on upcoming deadlines.
   Choose one:

   • Go only if they pay and confirm (in writing) what “done” means for the next milestone; or
   • Stop and confirm you cannot responsibly commit to deadlines while payment is withheld and requirements are disputed.

7. If you’re a small business and the customer is a larger private-sector business, consider the Office of the Small Business Commissioner (OSBC).
   OSBC can help with payment disputes where a small business complains about a larger business (and can also provide guidance/signposting when it cannot investigate). Keep it as a support/escalation option while you continue to document the dispute. (If your work falls under specialist regimes like some construction adjudication routes, OSBC may not be the right place.)

8. Keep statutory late-payment remedies as a later rung on your escalation ladder (only if it’s genuinely “late,” not legitimately disputed).
   If the invoice (or a portion of it) is accepted/undisputed and simply overdue in a business-to-business deal, you may be entitled to statutory interest and a fixed compensation amount. If the invoice is legitimately disputed, treat interest/compensation as something to revisit after the dispute is narrowed or resolved.

9. If they still won’t engage, prepare the right kind of pre-action letter for your situation.

   • If the client is an individual (including a sole trader) and you’re pursuing a debt, the Pre-Action Protocol for Debt Claims may apply.
   • Otherwise, follow the general Practice Direction – Pre-Action Conduct and Protocols / any relevant protocol.
     Keep it factual: what you provided, what’s owed, what’s disputed, what you need to restart, and a clear deadline to respond/pay. If you later issue a claim, use the appropriate HMCTS online route for money claims where suitable.