Sorry to hear about the incident, DC. Hopefully your dog is okay and the unfortunate medical expense won't create too much of a burden on you.
What I'm getting ready to say probably won't be a popular opinion, but you asked. I at least owe you my honesty, however accurate or off-base it might seem to others. And I have two lovable muffs myself (a mixed Lab that's 12 yrs old, and a Yorkie that's 5). The mixed Lab is very gentle, very laid back. Always has been, never been aggressive, not even when provoked. It's just simply not in his nature to be mean-spirited. And he's also well-trained, obeys my every command. The Yorkie? Hah!... he's full-breed, which means he's both feisty-natured and curious about everything. Lots of energy, not afraid of anything, ready to take on the world.
I live in a townhouse, an end unit. We might have about 15-20 families living in our small, rural development. It's not a huge neighborhood, which is nice.
On occasion, I will let the Lab off his leash to walk alongside when we go outside. Which like most places is technically not allowed. But I do it anyway, because like I said - he's not aggressive, he's extremely friendly and he always obeys my commands. I'd never do that with the Yorkie. He's cute as a button, but he's also dumber than a box of rocks and ready to take on the world.
Knowing the risks, assuming the risks, however unlikely they are because of my years spent with that dog, still, prevents me from expecting (or even asking) someone else to assume responsibility for what is ultimately my negligence. Even if the other dog owner is being negligent and breaking the law too with his dog being off its' leash.
Of course... maybe there's an ordinance that would make an exception if the incident happened on the inured dog's owner's own property, but it's highly doubtful that such a law, even if it were in existence, would supersede the law preventing dogs being outside without a leash to begin with. In golf, we call it the ol' rub of the green. Not sure what the legal terminology is, but it is what it is.
I would not pursue it.
But it no less sucks, and I hope your dog recovers quickly and that this entire debacle doesn't put any undue stress upon you.
My Lab has been with me for 12 years, my kids can't remember their lives without him being a part of it. But his health is starting to deteriorate, his mobility is becoming impacted because of neuropathy, and his quality of life just clearly ain't what it used to be. He doesn't appear to be in any pain, he's just losing motor function because of how the disease impacts the nerves and muscles. But that makes it even more difficult. If we was hurting, if he was yelping out in pain - it'd be much easier to make the decision. I recently told my kids, "you're gonna be lucky if he's with us this time next year, so make sure you enjoy him while you can." Now both my kids are grown, but they're like, "Nah - he's got a few more years."
Who knows? Maybe they're right. Maybe what I'm seeing happening now isn't at the stage that I think it is. But the worst thing that we could do is be that selfish, to put that lovable family member through that degree of pain just so we can enjoy him a few months longer. I've appreciated him too much to put him through that.
Anyway... just letting you know that I am familiar with the joys and frustrations of being a dog owner!