On 26 August 2026, Meta agreed to pay $17 billion over ten years to settle claims brought by attorneys general from 51 US states and territories, resolving allegations that it designed Facebook and Instagram to be addictive to children, harvested data from under-13s in breach of COPPA, and concealed what it knew about the harm (NPR). The settlement lands midway through a federal trial that began on 17 August before Judge Yvonne Gonzalez Rogers in the US District Court for the Northern District of California, brought by California, Colorado, Kentucky and New Jersey, seeking up to $1.4 trillion in penalties (NPR). Judicial approval is still pending.

The headline number will get the attention. The more useful lesson, for any UK board, is what the underlying allegations were actually about. Not a data breach or a rogue product feature, but a pattern of decisions: build the addictive mechanic, measure the harm internally, don’t disclose it.

Corporate liability is a board decision made real

Regulators and claimants rarely stop at the company. Where a company’s conduct is alleged to have caused harm that was foreseeable and internally documented, the next question is who on the board knew, when, and what they did about it. In the UK, that question has statutory teeth. Directors owe duties under sections 171–177 of the Companies Act 2006, including the duty to promote the success of the company for the benefit of members as a whole while having regard to the interests of employees, customers and the company’s reputation, and the duty to exercise reasonable care, skill and diligence (legislation.gov.uk). A board that receives evidence of harm caused by its own product or platform and does nothing is exposed on both counts, regardless of the sector.

Where litigation exposure becomes personal

Three risks compound once a company faces litigation of this scale:

  • Wrongful trading. If contingent litigation liability is large enough to threaten solvency and directors continue trading without minimising the eventual loss to creditors, they can be personally ordered to contribute to the company’s assets under section 214 of the Insolvency Act 1986 (legislation.gov.uk). The test is objective: what a reasonably diligent director in that seat ought to have known and done, so “we didn’t think it would get this bad” is not a defence once the risk was foreseeable.
  • Disqualification. Where a board is later shown to have ignored known risks. Through litigation, regulatory findings, or an insolvency practitioner’s report, directors can face disqualification proceedings under the Company Directors Disqualification Act 1986, separate from and in addition to any liability for the underlying conduct.
  • Regulator and IP scrutiny of decision-making. If a company later enters an insolvency process, an appointed insolvency practitioner will review board minutes, risk registers and correspondence for evidence of what directors knew and when. Litigation of this profile creates exactly that paper trail.

None of this requires a UK company to be the size of Meta. It requires only that a board sat on evidence of harm, discussed it, and the record of that discussion later becomes relevant to a solvency or disqualification question.

What this means in practice

Boards operating platforms, products or services aimed at vulnerable users (not only children), should treat internal risk assessments as documents that may one day be read by a regulator, a court, or an insolvency practitioner, not just by the board itself. That means recording what was raised, what was decided, and why, and being able to show that decisions were tested against the duties directors actually owe, not just against commercial or engagement metrics.

How Essential Counsel helps

As legal strategy operators, what we do is work with directors and boards who are facing, or are worried about facing, personal liability arising from how their company has been governed: exposure under sections 171–177 of the Companies Act 2006, wrongful trading risk as solvency comes under pressure, potential CDDA disqualification proceedings, or scrutiny from an insolvency practitioner or regulator. We help directors understand where the exposure actually sits, coordinate the specialist solicitors the situation requires, and build the strategy and evidence trail that a defensible board decision needs. If your board is carrying a governance risk like the one now playing out for Meta, talk to our Essential Counsel team before a regulator or an IP does.

Disclaimer: This article provides general information only. It is not legal advice and does not create a solicitor-client relationship. Laws and interpretations change. Readers are encouraged to confirm details with current primary sources or a qualified solicitor.