Obeying illegal orders is not any kind of defence, legally or morally. Carrying out an illegal order is almost as serious as giving one.

This episode doesn't sound as if it had anything to do a systematised policy of interogation and torture, unlike Abu Ghraib, but was more a case of bullying and brutality. I'd think that in the circumstances in Iraq at the time that probably would not be official policy. (In some other situations involving the British Army it has undoubtedly been.)