My understanding is that BA is not allowed to downgrade the compensation on damaged luggage. In article 26 of the Montreal convention is stated:
Article 26 — Invalidity of Contractual ProvisionsAny provision tending to relieve the carrier of liability or to fix a lower limit than that which is laid down in this Convention shall be null and void, but the nullity of any such provision does not involve the nullity of the whole contract, which shall remain subject to the provisions of this Convention.