Based on the Montreal convention, LH`s liability is limited to 1000 SDR for baggage damage...
"The air carrier is liable for destruction, loss or damage to baggage up to 1,000 SDRs (approximately EUR 1,230).
In the case of checked baggage, it is liable even if not at fault, unless the baggage was defective. In the case of unchecked baggage, the carrier is liable only if at fault."
If you get a full refund is written on another page however and in LH`s case highly dependant on your status and yearly revenue on LH...