Personally I would go for cash, even if somewhat less value, in order to get replacement luggage that meets my needs, and not just some approximation of it (e.g., a generic luggage replacement that lacks the compartments, wheels, handle that I want).

But I don't know how much BR provides as compensation. I would say that several years ago, AC provided fairly generous compensation for expenses incurred due to delayed luggage (several days of not having it due to "baggage system breakdown at YYZ").