Cannot advise where you stand legally!!! BUT! would assume that providing your dogs were under control and on a leash on the highway that you would have a valid claim against the owner of the terrorizing dog's owners! Either on their general househould insurance under pulic libility/damages???? Or against their pet insurance!!!! assuming they have it!!! As I say - this is a guess!!! ask citizens advice!

Hoping the poor little fellow makes a full recovery! You sister must be heartbroken!
regards
DT