I agree, she should pursue the case in small claims court. Small Claims courts are often more about justice than letter of the law. Small claims courts are sometimes not run by judges but by lawyers. They are often less formal about rules of evidence, etc.
I'm just trying to point out that its not a slam dunk case and it could go against her.
And this is not an issue of dog laws. The tort laws apply ANYWHERE someone is damaged. Lets say, for example, that your neighbor walks up your walkway, and trips on a paving stone that just slightly is uneven. And it just became uneven because of a minor earth tremor a couple of days ago. Did you deliberately place the stone so someone would trip on it? Was it unreasonable that you didn't notice the stone was slightly out of alignment? Is it reasonable for someone to expect you to check the alignment every day in case one pops up? On the other hand, if your mailperson had pointed the stone out to you last week and you hadn't fixed it, then you could be considered negligent.
This is the SAME situation. Your neighbor was damaged through no fault of your own. Should you be penalized because of it? The tort laws are there to protect people from being held legally liable for things that happen through no fault of their own.
I think what is coloring most respondents opinions here is the apparent cavalier attitude of the neighbors. They are being portrayed as the bad guys here (and maybe they are) but maybe they aren't.

