Is a cost overrun automatically considered a breach of the CM's duty of care to the Owner?

A cost overrun is not automatically considered a breach of the Construction Manager's duty of care to the Owner because it can occur for various reasons that may not indicate negligence or a failure to fulfill professional obligations. The duty of care is generally assessed based on whether the Construction Manager acted in accordance with the standards of the industry, which includes proper planning, budgeting, communication, and risk management.

In circumstances where the cost overrun is due to factors outside the Construction Manager's control—such as unexpected material price increases or changes in project scope that were not foreseeable—this does not imply a breach of duty. It’s essential to consider the context and the actions taken to mitigate the situation. If the Construction Manager has a history of reasonable performance and has informed the Owner of potential issues as they arise, this would reinforce their adherence to their duty of care.

While communication can play a significant role in how cost overruns are perceived, the existence of a cost overrun alone, without additional context, does not equate to a breach. Understanding this distinction helps differentiate between unavoidable challenges encountered during a project and instances where the Construction Manager may have failed to properly execute their responsibilities.