During a session, my party fought and killed a bear. After inspecting its cave we found one bear cub. Our lawful evil paladin goes to kill the cub as recompense for the mother injuring him.

My chaotic good Warlock isn’t a fan of this idea and casts suggestion on the paladin, telling him “don’t kill the cub”. The paladin fails the save and the suggestion is successful, however, he still goes to wound the cub as that was not covered by the suggestion spell.

He rolls a natural 1 and the DM states that he cuts himself taking out his knife to harm the bear, taking damage. It is then brought up that the rules of the suggestion spell state that: “If you or any of your companions damage the target, the spell ends”. 

My question is, does the spell end because the paladin is my companion and he injured himself while under the spell? Or does him being the target of the spell supercede him being my companion?

I don’t mind either option, I was just curious what others think.

If I was DM I wouldn’t end the spell. The spell is worded the way it is because it is not intended to be used on your own party. So even though your ally, the paladin, damaged the target, themselves, I still wouldn’t end the spell. 

IMHO it's akin to the difference between slapping yourself (in the dream) to end a dream and someone not dreaming slapping you to wake you up.

I wouldn't end the spell

Isn't the point of homebrewing critical failure rules to promote chaotic, whacky fun in your games? Sounds like you guys got what you wanted, and it's not even like the Paladin was trying to cheese the Suggestion spell away. I don't see a reason to not end the spell.

I'm generally against the idea of dealing damage to yourself on a nat 1 way more than I'm against the idea of having self-inflicted damage end the Suggestion spell.