It depends on whether or not the priest was justified in his actions. If he convalidated a civil marriage after an annulment was granted for the first marriage, then there is nothing more that needs to be done. But if he illegitimately “blessed” a presumptively invalid civil marriage when no annulment had been granted, then he engaged in a very serious wrongdoing that should be reported to his bishop or religious superior immediately.
As for the couple, if no annulment has been granted then the first marriage should be placed before a marriage tribunal for adjudication. If an annulment is granted, their marriage can be truly convalidated by another priest. If an annulment is not granted, they may live as brother and sister (i.e., no sexual relations) for the sake of the children. In the meantime, until a decision is reached, one way or the other, the couple should live as brother and sister. If the couple does all this, they may go to confession, inform the confessor that they are not currently engaging in sexual relations and will abstain pending a decision from the tribunal, and in that case can be readmitted to the sacraments.
