That's shocking, on the face of it it appears to be a simple case, but then the other side considered it worth going to court so maybe they felt otherwise. I thought such cases were based on what was reasonable, the idea that it isn't reasonable to cycle along a cycle lane, it's just absurd.
The grounds for appeal seem logical, is that denial the end of it? I do hope not, you seem to be getting good legal support, maybe they will find a way to pursue it.
Good luck and look after yourself, this must feel like another assault, it's hard to imagine that, insult to injury.