Consumer Protection Law
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You could possibly do that but if there is a business impact by that client for you doing that you expose yourself to liability. I would suggest filing for the damages in small claims court depending on the amount owed. Filing of the lawsuit may force their hand and get them to pay or risk going to trial before a judge.
Yes, that would help mitigate some of his possible counterclaim against you. However, I still think the best route would be to file suit and seek all attorney fees, etc. that the court will grant. However, if you choose to send this type of notice, then be sure it is certified mail and return receipt requested so that you have proof that he was given notice.