Schools, teachers and students had reasonably expected that those taking the June examinations would be treated the same as students who had sat earlier papers and handed in controlled assessments, argued Clive Sheldon QC, acting for the alliance.
The exam boards and Ofqual knew at the time of the publication of the January grades that this reasonable expectation might be disturbed but did nothing to let schools, teachers and students know that extreme changes might take place in the summer, he said.
Mr Sheldon told Lord Justice Elias and Mrs Justice Sharp at the High Court hearing that there could be no doubt that there was "grade manipulation" by the examination boards to meet Ofqual's "statistical fix" and this was an unlawful abuse of power.
Clive Sheldon QC, representing an alliance of of pupils and schools, local councils and teaching unions in a legal action, told two judges it was not the fault of the students who had been awarded lower than expected grades in this summer's GCSE English exams.
He said the students had "worked well and hard" and added that the evidence of unfairness was overwhelming. Mr Sheldon said the students were the victims of a radical change in grade boundaries that occurred without warning.
He said Ofqual had given an instruction to avoid "grade inflation", and bodies awarding grades were required to meet tolerances set by Ofqual based on statistical predictions derived from students' performances in Key Stage 2 examinations five years previously.
Russell Hobby, General Secretary of the National Association of Head Teachers, said outside the High Court:
"We want a regrading. Too many students have actually left the education system believing that it's not for them as a result of this.
"So Ofqual's solutions have been totally inadequate. What we need is the grade shifted back to what it was in January and then tens of thousands of students who've been denied apprenticeships and higher education can carry on with their lives."
The judicial review hearing is underway at the High court on behalf of thousands of students who it is claimed were downgraded in this summer's English exam.
The lawyer for the schools, teachers and pupils has argued in court that this failure by pupils to achieve grades was not as a result of not "working hard or well", or failing to produce work of the same standard as their peers, who took the exam in January 2012.
But was a result of "illegitimate grade manipulation" because of a "statistical fix".
Councillor Judith Blake, deputy leader of Leeds City Council said: "We're here on behalf of the thousands of young people who we believe have been treated grossly unfairly. We're here to seek justice on their behalf.
"We do not believe it's right that the incompetence of Ofqual and the exam boards should be picked up by them.
"There are many young people who have not been able to gain access to their apprenticeships, the course that they wanted as a result of this."
A legal challenge over this summer's GCSE English controversy is due to begin at the High Court.
An alliance of pupils, schools, local councils and teaching unions is pursuing action over decisions which they say left thousands of teenagers with lower than expected grades in the subject.
It is challenging a move by the AQA and Edexcel exam boards to raise the boundary needed to get a grade C between January and June, as well as what they claim was a failure by England's exams regulator Ofqual to address the situation.
The alliance claims that as a result of these decisions, an estimated 10,000 pupils who took their English GCSE exam in June missed out on a C grade, and is asking for papers taken this summer to be regraded.