A New Year, a New Playing Field
You file the complaint, expect discovery to unfold before a judge, maybe even anticipate a jury trial.
But under Nevada’s newly revised Court-Annexed Arbitration Program, your case never makes it that far. Instead, it’s directed into mandatory nonbinding arbitration, where the rules of evidence are looser, the timeline shorter, and the right to a jury, while technically preserved, feels a little further away.
Starting January 1, 2026, Assembly Bill 3 (AB3) will double the jurisdictional limit for mandatory nonbinding arbitration from $50,000 to $100,000, expand the number of exemptions, raise awardable attorney fees, and remove the limit on arbitrator compensation.
On paper, it’s about efficiency. In practice, it redefines how, and where, Nevadans pursue civil justice.
A Refresher: Nevada’s Mandatory Arbitration Program
Since its creation in the early 1990s, Nevada’s Court-Annexed Arbitration Program (CAAP) has aimed to remove lower-value cases from crowded district court dockets and move them into a faster, less formal process.
The program applies in Clark and Washoe Counties—Nevada’s two most populous jurisdictions—and assigns eligible cases to neutral arbitrators drawn from a rotating panel. Those arbitrators oversee discovery, hear evidence, and issue nonbinding awards.
Either party can reject the award and request a trial de novo, but doing so carries cost risks and time penalties. Discovery and evidentiary rules are streamlined, and the entire process must typically conclude within six months.
For nearly two decades, the program covered cases valued under $50,000. That limit, unchanged since 2005, is now being recalibrated to match inflation and the growing costs of litigation.
The Road to AB3
AB3 began as a relatively modest proposal from the Nevada Supreme Court and the Administrative Office of the Courts. They asked the Legislature to raise the arbitration cap to reflect inflation and the rising costs of litigation. After all, $50,000 in 2005 dollars equates to roughly $83,000 today.
The logic was straightforward: with medical costs, vehicle repairs, and lost wages all ballooning, more and more “simple” or “straightforward” cases were falling outside arbitration’s reach, forcing them into the district court system and adding to backlog. The arbitration program felt like it was losing its teeth. Getting an exemption from the arbitration program sometimes felt like the civil world equivalent of the phrase “you can indict a ham sandwich.” If Nevada is going to have this program, it was only a matter of time before the value limits saw an increase.
The Nevada Justice Association (NJA), representing the plaintiff’s bar, initially opposed the measure, voicing concern that raising the cap would expand the number of cases forced into arbitration and further distance litigants from jury trials.
The NJA ultimately withdrew its opposition after negotiating key amendments, including:
Raising the recoverable attorney’s fee cap for prevailing parties from $3,000 to $15,000;
Adding new categories of automatic exemption; and
Leaving certain procedural protections intact (such as the ability to demand a trial de novo).
The compromise passed with bipartisan support, and Governor Joe Lombardo signed it into law on June 3, 2025.
The Key Changes
- Jurisdictional Cap Raised to $100,000
AB3 raises the arbitration program’s monetary threshold from $50,000 to $100,000. This means any civil case in Clark or Washoe County with a probable jury award under $100,000, exclusive of attorney’s fees, costs, and interest, will automatically be assigned to arbitration unless it falls under a listed exemption.
- Expanded Automatic Exemptions
There are certain categories of cases that are, by their very nature, exempt from the arbitration program. Three new categories join the automatic exemption list:
Insurance bad faith actions seeking punitive damages;
Sexual assault or sexual battery actions; and
Product liability actions.
These claims, which often involve complex facts, large damages, or public policy implications, were essentially deemed inappropriate for an abbreviated adjudication through the arbitration program.
- Attorney’s Fee Cap Increased to $15,000
The recoverable attorney’s fees for prevailing parties rise from $3,000 to $15,000, aligning CAAP with Nevada’s Short Trial Program. While a welcome update for practitioners, it still falls short of the compensation available in full district court litigation.
- Arbitrator Compensation Cap Removed
AB3 removes the old $100-per-hour, $1,000-total cap on arbitrator pay. The Nevada Supreme Court will now set compensation limits by rule, ensuring rates remain current and competitive.
- Parallel Changes to Short Trials
The Short-Trial Program, which governs de novo trials following arbitration, also sees its limit rise to $100,000, maintaining parity between the two systems.
Supporters Say: Efficiency and Modernization
Supporters describe AB3 as a long-overdue modernization. With medical costs, property damage estimates, and expert witness fees rising sharply, more and more cases were slipping beyond the old $50,000 limit and into full district court proceedings—undermining the purpose of the arbitration program.
By raising the cap, proponents say the reform restores balance. Arbitration provides quicker resolutions, reduces court congestion, and lowers litigation costs for both sides. The increased attorney’s fee recovery, they note, makes the process more practical for counsel handling modest-value cases.
Supporters also emphasize that arbitration remains nonbinding. Litigants retain the right to a jury trial by requesting a trial de novo; they just have to earn it by going through arbitration first.
Critics Say: A Step Away from the Jury Box
Critics are less convinced. They argue that while arbitration is nonbinding, its practical effects are binding in all but name. Cases funneled into the arbitration track often settle based on the arbitrator’s award; not because clients are satisfied, but because challenging the award and requesting a trial de novo is often too costly or time-consuming to justify.
In that sense, critics argue that AB3’s expansion subtly shifts the balance away from the Seventh Amendment’s promise of trial by jury and toward an efficiency model that prioritizes docket management over litigant choice. It prioritizes speed over rights.
Sending a greater number of cases into a mandatory arbitration program revitalizes lingering constitutional questions. Although courts have consistently upheld Nevada’s nonbinding arbitration system, raising the jurisdictional cap to $100,000 leads one to wonder, how far can our government go in restricting a person’s right to a jury trial (and taking decision making power away from the people) in the name of efficiency?
The Larger Question: Efficiency at What Cost?
Beyond practical considerations, AB3 raises a deeper philosophical question about the rule of the civil jury is a democratic society. There are important motivations underlying the Seventh Amendment that an expanded mandatory arbitration program does not address.
First, the civil jury is a structural safeguard of liberty. The founders were concerned of judicial elitism and resentful of unchecked judicial power. They believed that juries acted as the democratic element of the judiciary.
Second, it creates a vehicle that allows for citizens to participate directly in government, a core democratic ideal. Civil juries are intended to help legitimize outcomes and ensure judicial decisions reflect community values, not detached technical rulings. It is important to have our citizens engage is legitimate aspects of civil service.
Third, having individuals, who are insulated from state influence, deciding private disputes, allows for a more impartial resolution. The founders feared that the judiciary would favor creditors, merchants, or the government itself over ordinary citizens; the civil jury helps prevent that from occurring.
These interests are all diminished by sending a larger number of cases into a mandatory arbitration program. $100,000 is not a small sum. The average annual salary in Nevada is $58,788. Under these new rules, an individual could have a claim for damages for nearly two times their annual income, and our government has declared that it is a “small” or “simple” case, and they will be compelled into arbitration. The arbitration lacks the democratic element of a jury, it does not allow an opportunity for our citizens to engage in civil service as jurors, and there is no meaningful safeguard to ensure that arbitrators are insulated from improper influences.
Arbitration can absolutely deliver fair, fast outcomes. But it can also compress stories, simplify damages, and reduce the human dimension of civil justice to line items in a neutral’s award. It sacrifices many of the elements that our founders believed critical for the survival of our nation with the simple goal of efficiency.
Conclusion: A Balancing Act
Assembly Bill 3 represents progress, but is it in a positive or negative direction? It brings adjustments to fees and procedure. It attempts to make concessions for certain cases and making it more reasonable for attorneys to handles the cases, but it also extends arbitration’s reach deeper into the heart of Nevada’s civil justice process, reshaping how and where ordinary citizens find resolution.
For now, the Legislature’s bet is clear: efficiency will yield fairness. As Nevada doubles its arbitration threshold, it also doubles down on a fundamental question—how much efficiency can justice bear before it begins to bend?”
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