You are at least partly at fault. The owner of the other dog may be partly at fault as well. Impossible to say without all of the facts.
If the other dog was on its property and never left its property, it doesn't matter that it was not leashed or that it attacked yours. You would be 100% responsible. That dog is doing what dogs do, defending its territory.
If both of you are found to be equally responsible, the amount you paid for injuries to your dog would be subtracted from the amount the other owner paid for injuries to their dog, and you would be ordered to pay half of the difference.
No injuries to your dog, $1,000 to the other dog, you pay $500.
$200 to your dog, you pay that.
$1,200 to the other dog, the owner pays the first $200 and you split the remaining $1,000.