Real Estate Law
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Hi and welcome to JA. I am Ray and will be the expert helping you today.
It may be hard to resolve this.If neighbor wants a new driveway I would tell him that would be his problem on his property.The retaining wall is likely your problem although neighbor might have caused it.Since it is on your property again it will be hard to prove one way or the other and you may have to foot repairs for it.
Here I think he likely has to repair his driveway and you the retaining wall.
I do not see you liable for his driveway here because again it is on his property.I am not at all sure a court would hold you liable.It is just as likely that your retaining wall just got old.If he was worried about it he should have offered to split cost when driveway was repaired.
You can contact your homeowners here and see if any of it covered as a means to resolve it.Maybe his covers his driveway.
I appreciate the chance to help you today.Please let me know if you have more follow up.Thanks again.