Addison Lee drivers told to defy bus lane law (and to just say SMIDSY)

TfL are wrong.

I would hesitate to take legal advice from them.

The Road Traffic Act 1991 decriminalises bus lane offences.

I'm happy to shown otherwise though, if you can find the relevant and applicable legislation.

Personally I've got no idea but the overwhelming evidence on the internet suggests you are wrong, ie

'Bus-lane contraventions have not been decriminalised. While they may be enforced by a council through the civil procedure, they may also be enforced by the police through criminal proceedings. If the police begin criminal proceedings, the council cannot enforce through the civil procedure.'

http://www.trafficpenaltytribunal.gov.uk/site/scripts/documents_info.php?documentID=41&pageNumber=4