This quest can be completed quite easily without killing all the Bandits. This can be done by killing the criminal they are attempting to rescue – if you kill him, you will receive 140 good points and the quest will be completed.
Flick, who the player met at the arena, is in this quest; he's the executioner.
The guards that escort the prisoner along with the Hero go by the names of Monty and Flynn.
If you stray too far from the prisioner while escorting him, the guards may say "play the game mate, stick by us eh?" as if they know they are in a video game and that escorts are often a terrible part of said game.