You can ask your institution for the appeals for admissions' policy, and then appeal under those. All universities have them: UCAS do sometimes make mistakes, and so do universities, because at the end of the day, it's human beings inputting all the information - often, though, if you're offered a different choice from what you were originally offered it's because of a reason such as yours ie not meeting the terms of the offer.
If a course says, say, you need a B in psych, but you only get a C, you haven't met the requirements and you won't necessarily be accepted even if your overall points exceed your offer: this can be an internal university requirement, or one of an external body - if your degree comes with automatic professional recognition or membership, say. In the first case, you can have a chance in your appeal; if it's the second, though, you won't win, because the university isn't the one making the decision.
I doubt very much that you would be successful in suing and gaining any form of compensation: the decision to admit or not is based on academic judgement, which is one thing that is very hard to have over-ruled - and you have admitted yourself that you did not fulfill the terms of your offer.
You have two real options left to you, then, if this is the institution you are determined to study at:
1. Accept the alternative you've been offered, and seek a transfer once you're there (assuming the example above about professional accreditation doesn't apply, because if it does, you'll be in the same position): people sometimes don't show up at the start of term, so more places can become available. If not, you can usually transfer back to the first year the following year, on a different course, as long as you pass all your exams etc You have up to four years of funding available, so this works for three year courses: I don't know what you want to study, but this could be one option. Besides, you may end up falling in love with the new course and not even wanting to switch.
2. If you read the appeals' procedure, and believe you have grounds based on that, appeal the decision.