kittycat, I know you have had a horrible experience, but you will panick the op.
The courts WILL NOT give residence of children to a grandmother on a load of half baked allegations and lies.
The op is their primary carer, I assume they have lived with her all their life. She seems to have strong views that her ex is an alcholic which I assume is a view with some substance and not just a malicious allegation.
I don't think alarm bells are ringing at all, unless you serously believe and want the op to believe that the courts are simply utterly corrupt, which is not the case, whatever John Hemmings and the Daily Mail want you to think.
People get very emotional about these issues, as well they might. They say and do outrageous things. But for a court to make a finding there has to be evidence. If the worst they can say is that step father is 'controlling' this will go absolutely no where.
Op - you need a friend with you to take notes of what is said. Thus, if any decision is made which you do feel is wrong, you can go to a lawyer urgently or get advice from a CAB.
But I honestly don't think you have any thing to worry about. Just try and stay calm, state your case. Say you have offered mediation and (presumably) would be willing to try again.