If he does have insurance (does he have it? You never did say if he had it or not, merely that he 'doesn't want it'), then I suggest taking the pragmatic view and claim on the insurance. A lot of the time the insurance company will then pursue the carrier in question, so your friend gets what he wants in all respects.

Having said that, I am still a bit surprised that QF declined to pay anything, as long as all the facts of the case have been presented to us and there is no factor involved that complicates the matter, for instance his stuff that he needed was in one of your bags that did not turn up on time, or that his bags were all tagged to your, etc.