I'd be wary of having a big group lunch with all the candidates; that gets dangerously close into "group interview" territory (which, to be fair, is pretty common in some industries, but leads to candidates feeling pressure to "stand out" and act unnatural just to be noticed).
I'd much rather see (both as a candidate and employer) a group lunch with one candidate and a few members from the team they'll be working with - ideally after they've had at least one interview, and not including the person who'll be interviewing them right after lunch.
Agreed; there is that risk. We often do company lunches anyway - so to mitigate things what I say is "guys, today is actually a company lunch day so if you'd like to join us and chat to some of the current employee's then feel free - no pressure, it's not part of the interview. If anything we see this as your chance to ask questions."
I'd much rather see (both as a candidate and employer) a group lunch with one candidate and a few members from the team they'll be working with - ideally after they've had at least one interview, and not including the person who'll be interviewing them right after lunch.