The legal battle, launched at the High Court in London, comes
amid a separate political furore over photographs published in a tabloid newspaper which allegedly show an Iraqi prisoner being abused by British troops.
The Ministry of Defence (MOD) refuses to accept responsibility for the deaths, but the families' lawyers are demanding a judicial review to examine whether the killings were a violation of the victims' right to life under the European law.
"We do not accept liability for the deaths they have brought
to our attention, and have written to them informing them of our reasons," an MOD spokesman said.
Lawyers argue that because the Iraq war had officially ended
when the victims died, and because Britain was an occupying
power, the European Convention on Human Rights should apply.
"The important thing to remember about these cases is
Shiner wants inquiry to examine
the extent of occupation planning
firstly the war was over and we were occupying the country. And secondly, these people were going about their lawful business in their homes or on their farms" when they died, said human rights lawyer Phil Shiner, who is representing the Iraqi families.
Britain joined the US-led war on Iraq in March last year.
President George W Bush declared the war over on 1 May 2003.
The high court case comes as the both British and American
soldiers stand accused of abusing Iraqi prisoners after media
organisations published photographs of alleged torture.
Furthermore, the families' lawyers said in a press release sent to Aljazeera.net, they will argue that the UK Government must now establish a fair and rational compensation scheme in Iraq that does not discriminate on the grounds of race or nationality.
At present the MOD are refusing to pay any compensation, even when it is clear that tragic mistakes leading to these deaths have been made. Instead small "charitable donations" of no more than £500 are being made.
Critics in Britain have slammed the United States for what they see as its heavy-handed approach in Iraq, contrasting it with the efforts of British troops occupying the oil-rich southern part of the country to win the hearts and minds of local people.
But the reputation of the British forces came under fire when
the mass-circulation Daily Mirror newspaper last Saturday ran a series of pictures apparently showing British troops abusing an Iraqi captive.
One appeared to show a soldier whose face was not visible urinating on a hooded man.