Glasgow City Council's legal bid to recover £6.5m from First Bus, the former employer of bin lorry driver Harry Clarke, has been thrown out.
Six pedestrians died after Mr Clarke collapsed at the wheel of the lorry in the city centre in December 2014.
Lawyers for the council claimed the bus company acted negligently by failing to provide an accurate reference.
However, a judge threw the action out as evidence showed the council failed to chase up the firm's HR department.
The court heard claims that First Glasgow failed to disclose that Mr Clarke had lost consciousness at the wheel of a bus in 2010.
Mr Clarke went on to drive the bin lorry which he lost control of moments before it struck and killed six people and injured 15 others.
Erin McQuade, 18, and her grandparents Jack Sweeney, 68, and Lorraine Sweeney, 69, from Dumbarton; Stephenie Tait, 29, and Jacqueline Morton, 51, both from Glasgow; and Gillian Ewing, 52, from Edinburgh, died in the crash.
The council's lawyers also claimed the alleged failure to disclose the information about Mr Clarke passing out meant the firm breached a duty of care to the crash victims.
The £6.5m sum sought would have compensated the council for the money it paid to relatives of those who lost their lives.
However, in a judgement issued at the court on Thursday, Lord Ericht said the evidence showed that a former manager of Mr Clarke's at First Glasgow called Frank McCann told him that an HR employee called Darryl Turner was the person responsible for writing references.
Mr Clarke told his prospective employers about the need to contact Mr Turner, but nobody from the local authority followed up on the information.
Lord Ericht concluded that the action must fail as the council had not proven the bus company had acted negligently.
He wrote: "There was no evidence from… emails or any other source that anyone from the pursuer had acted on the information received from Mr Clarke that a reference would require to be requested from Mr Turner rather than Mr McCann, and emailed or otherwise contacted Mr Turner requesting a reference.
"There was no evidence of a reference having been received from Mr Turner.
"I find that no reference was received from Mr Turner."
Crown lawyers previously decided not to prosecute Mr Clarke on the basis that there was "insufficient evidence in law" to bring proceedings.
The families of those who lost their lives tried to raise a private prosecution against him, however senior judges did not allow the prosecution to proceed.