I personally agree with the others that said to take care of the dog yourself. I would. Being they are family they probably think you will continue to just let it slide, or not take legal action against them because they are family.
To some extent I disagree with the whole fence thing, I agree that it is my responsibility to keep my animals safe, BUT I feel it is the dog owners responsibility to keep their dog in their own yard where it belongs and it is safe. If I didn't have a fence, I don't feel it is my fault if a dog got my chickens, because my chickens have a right to be in my own yard, and the same as I keep my animals in my yard, others should keep theirs in their own where they belong. I am a responsible animal owner as I keep my animals in my yard not roaming all over the place, my dog was taught not to leave my yard and she doesn't leave it, if the neighbors dog is not going to be taught to stay in its yard it should be hooked. The owners should be responsible for their dog.
Now I am not saying that we don't all have to take actions to keep our animals safe, but the fact of the matter is if dog owner's were as responsible as we are, we wouldn't have to worry about it.
Just my 2 cents.....