I have had a neighbors dog come over my fence and kill some of my birds. My neighbors acted as if it were my fault and never offered me a penny OR even an apology. Unfortunately, I have to play nice, as they are also the in-laws. That being said, I commend your dad for wanting to do what is right. It is sad, but dogs will do what comes natural if they get loose. You said there were two dogs though...I'd offer the price for 10 hens instead of ALL of them. There was another responsible party involved, and to pay for someone else may encourage someone else to be negligent with their dog again since someone willingly paid for their mistake once. I would readily pay slightly above the fair share of half of the chickens according to what they go for in your area, as a peace offering to the neighbor along with a heartfelt apology as well. To pay for all of the damage may make the neighbor feel uncomfortable it would me if it had been my birds. I'd see the offer to pay half of the damage as honorable and apologetic for an accident considering the dog was contained but broke out on it's own. You just have to be careful not to make too big a deal or too little of a deal out of the offer. Make them feel respected but not feel bad for taking too much. Does that make sense?