The Ministry of Defence has agreed to pay £2.83m in damages in the case of 10 Iraqis who were tortured.
In 2007 seven UK soldiers stood accused of abusing the detainees in Basra in 2003.
After a six month-long court martial hearing, six men were cleared of all charges. The seventh became the country's first convicted war criminal after being jailed for a year and dismissed from the Army.
Here is a timeline of the case.
10 JULY 2008
The Ministry of Defence agrees to pay £2.83m in damages after 10 successful claims are made.
The payout will be divided between eight men who were mistreated, the family of Baha Mousa - who was beaten to death - and the brother of a 10th man who was also mistreated but later died in an unrelated incident.
Lawyers for the group of men say they are pleased an amicable settlement had been reached, while the MoD confirms the settlement comes with an admission of liability by the department as well as an apology.
14 MAY 2008
The government announces a public inquiry into the death of Baha Mousa.
Defence Secretary Des Browne tells MPs an inquiry "will reassure the public that we are leaving no stone unturned in investigating his tragic death".
Lawyers for Mr Mousa's relatives say other alleged cases of manslaughter and torture should also be examined.
27 MARCH 2008
The Ministry of Defence admits breaching the human rights of Baha Mousa, who died in British custody in Basra.
Defence Secretary Des Browne also states that the MoD would accept they breached the human rights of eight other Iraqi detainees.
This paves the way for compensation claims by the detainees and Mousa's family.
Lawyer Sapna Malik, representing Mousa's family says: "At last there has been some acknowledgement at a senior level of the wrongs that were done."
30 APRIL 2007
British soldier Corporal Donald Payne becomes the country's first convicted war criminal as he is jailed for a year and dismissed from the Army.
The 36-year-old had pleaded guilty to inhumanely treating civilian detainees in Basra in 2003.
No British servicemen had previously been prosecuted for war crimes under the International Criminal Court Act 2001.
13 MARCH 2007
The six-month long hearing ends with the acquittal of the last remaining servicemen.
Maj Michael Peebles, 35, and Warrant Officer Mark Davies, 37, both of the Intelligence Corps, are cleared of charges of negligently performing their duty.
Senior army officers and defence lawyers criticise the proceedings.
Col David Black of the Queen's Lancashire Regiment - the unit of the seven accused - says soldiers need to operate without being worried about "over-zealous and remote officialdom".
Gilbert Blades, solicitor for Maj Peebles, says the case exposes "weaknesses and gaps" in the court martial system.
Phil Shiner, who represented the Iraqis at the court martial, labels the outcome a "travesty" and calls for a public inquiry.
The Ministry of Defence says it will consider the judgement very seriously and if "lessons need to be learned, we shall do so".
14 FEBRUARY 2007
All charges are dropped against four out of seven soldiers on trial over allegations of abusing Iraqi civilians, while two charges are dropped against a fifth soldier. This soldier has already pleaded guilty to one charge.
Col Jorge Mendonca MBE, the highest-ranking British serviceman to face a court martial, is cleared of all charges along with three of his men.
L/Cpl Wayne Crowcroft and Pte Darren Fallon are cleared of treating Iraqis inhumanely.
Sgt Kelvin Stacey is cleared of the last remaining assault charges against him, having been cleared of other assault charges in January.
Cpl Donald Payne, who has already pleaded guilty to inhumanely treating civilian Iraqi detainees for which he faces a sentence, is cleared of manslaughter and perverting the course of justice.
Two of the seven men remain on trial. Maj Michael Peebles, 35, and Warrant Officer Mark Davies, 37, both of the Intelligence Corps, deny charges of negligently performing their duty.
22 JANUARY 2007
Sgt Kelvin Stacey is cleared of an assault charge against an Iraqi detainee.
He is acquitted of assault, occasioning actual bodily harm, due to lack of evidence.
But he remains on trial facing a lesser charge of common assault, drafted as an alternative to the ABH charge.
28 NOVEMBER 2006
Pte Jonathan Lee, who worked at the detention centre where the alleged abuse took place and is now attached to the Royal Engineers, tells the court that UK troops abused Iraqi detainees and later bragged about it.
He tells the hearing that he saw three regimental colleagues beating hooded Iraqi prisoners.
The prosecution says these are pre-interrogation "conditioning" methods which are banned under international law.
15 NOVEMBER 2006
Col Jorge Mendonca, who is accused of failing to prevent the abuse of Iraqi prisoners, is praised as "the best commanding officer by some way".
A former commander in Basra, Lt Col Hugh Eaton, tells the court he "could not imagine" Col Mendonca being negligent in his duty.
2 NOVEMBER 2006
Territorial Army soldier Pte Stuart Mackenzie, accused of selling fake pictures showing British troops abusing Iraqis, refuses to answer questions about them.
It is claimed the fake photographs show Queen's Lancashire Regiment soldiers urinating on an Iraqi man and the court hears how they were subsequently printed around the world.
Their publication led to "untold harm" to the British Army's "hearts and minds" effort in Iraq, the court is told.
Pte Mackenzie refuses to answer when asked whether he is the soldier pictured urinating on the hooded "Iraqi" shown in the picture.
He also refuses to answer when asked whether he had agreed to sell the staged pictures to a Mirror newspaper reporter for £5,000.
27 OCTOBER 2006
Iraqi Kifah Taha Musa Mutairi says detained Iraqi civilians were beaten if they could not remember nicknames of famous footballers given to them by UK soldiers.
He tells the court the names included Dutch stars Gullit and Van Basten.
26 OCTOBER 2006
RAF Senior Aircraftman Scott Hughes tells the hearing that he saw Iraqi civilians with bags over their heads being shouted at and abused by British soldiers.
SAC Hughes tells the court martial he was visiting a British detention centre in Basra where 11 Iraqi civilians were being held when he heard "loud noises" and "shouting".
When he went to investigate, he saw detainees with sand bags over their heads and arms outstretched, he says.
4 OCTOBER 2006
An Iraqi security guard breaks down in tears while describing how he was allegedly beaten by UK soldiers.
He says he was punched and kicked repeatedly for failing to stand with knees bent and arms outstretched.
The man weeps for several minutes while giving evidence about the alleged beating.
He says it happened at a detention centre after he was arrested as a suspected insurgent.
28 SEPTEMBER 2006
Iraqi hotel owner Ahmad Taha Musa Al-Matairi denies claims that he was an insurgent.
Lawyers defending the British soldiers accuse Mr Al-Matairi of stashing grenades and guns in his hotel in Basra, southern Iraq.
Under cross-examination, Mr Matairi is also accused by Geoffrey Cox QC of having Soviet army uniforms and videos of punishment beatings.
But Mr Al-Matairi says, apart from some lawfully-owned rifles used for protection, the bulk of the arms belonged to his hotel's co-owner.
27 SEPTEMBER 2006
Iraqi hotel owner Ahmad Taha Musa Al-Matairi urges the court to have mercy on Cpl Donald Payne.
Mr Al-Matairi is accused in cross-examination of exaggerating his injuries in order to get a larger compensation payout.
But he says: "I am not exaggerating. I was hit, I got a hernia, somebody died. That's a proof. I got taken out on a stretcher. That's a proof."
Then he adds: "I would ask the court to handle with care the person who admitted the crime."
26 SEPTEMBER 2006
Ahmad Taha Musa Al-Matairi tells the court that he believed he was going to die while being beaten by British soldiers in Basra in 2003.
He tells the hearing that soldiers from the Queen's Lancashire Regiment took bets on who could make him fall down.
The father-of-three claims the soldiers guarding him celebrated beating him and a group of other Iraqis "like it was Christmas".
Mr Al-Matairi, who had a brother killed by Saddam Hussein's regime, gives evidence to the court through an interpreter.
25 SEPTEMBER 2006
The barrister representing Cpl Donald Payne says it is "deeply unfair" his client's commanding officers are facing lesser charges.
Tim Owen QC says it is "deeply unattractive" that Cpl Payne's senior officers face the lesser charge of negligently performing their duties.
22 SEPTEMBER 2006
The prosecution alleges Col Jorge Mendonca allowed his men to violently abuse nine Iraqi detainees in direct breach of the Geneva Convention.
He never questioned the legality of their treatment, it claims.
Asked if he had heard screams coming from the building where the alleged abuse took place, Col Mendonca replies: "I express incredulity at that comment."
21 SEPTEMBER 2006
The court is told that the nine Iraqis allegedly abused by British troops were thought to be linked to the killing of six Royal Military Police three months before.
Prosecutor Julian Bevan QC says their suspected involvement in the killings of the Red Caps fuelled hostility.
The six Red Caps were gunned down by a mob in the town of Al Majar Al Kabir in June 2003.
Mr Bevan tells the court martial that the suspected involvement of civilians in the killings, which took place in June 2003, may have led to increased hostility between the soldiers and their detainees.
20 SEPTEMBER 2006
Prosecutor Julian Bevan claims Cpl Donald Payne "enjoyed" hearing Iraqis call out in pain as they were kicked and punched while in a detention centre.
The prosecuting QC says he referred to the noises made as "the choir", which he "conducted" in front of visitors to the centre.
19 SEPTEMBER 2006
Cpl Donald Payne pleads guilty to inhumanely treating Iraqi civilians at the start of the court martial proceedings.
He denies manslaughter and perverting the course of justice.
Six others plead not guilty to charges relating to the death of hotel worker Baha Mousa, 26, in custody in Basra in 2003.
The charges also relate to the alleged ill-treatment of other detainees.
Julian Bevan QC, prosecuting, tells the court the detainees were arrested on 14 September 2003 at the Haitham Hotel, where the army had found weapons including rifles, bayonets and suspected bomb-making equipment.
They were subsequently taken to a temporary detention centre where they were held for 36 hours and repeatedly beaten while handcuffed and forced to wear sacks on their heads, Mr Bevan tells the court martial.
One civilian, Baha Mousa, died as a result - in part from the multiple injuries he had received, Mr Bevan says.