The word le refers to the kidney, as you surmised. This is a direct object pronoun, and is correctly written. The word se is the indirect object pronoun, and it means to him, as you stated. Usually to him is written lo, which is the correct indirect object pronoun, but Spanish doesn't allow lo le because it sounds bad. So, to avoid cacophony, lo is replaced with se. The same goes for la le, by the way.
The lawyer demands that either the woman returns the kidney or she pays/compensates him for it.
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