What would you do?

If £500 got him the same replacement, then the replacement and an apology is a good offer. What i am saying is that giving nothing to the lad because HIS FAMILY refuse is a bit harsh. Would ignore whatever his family say and go straight to him and offer it, if he doesnt want it then he has made his own choice and can live with it. Allowing the family to refuse the offer for him and making him live with the result is harsh imo.
It was the brother that said he didn't want the 2nd hand replacement, the family just refused to let him go through their house insurance as he was visiting them at the time. That's what the OP says at least.
 
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