AB 3 Doubles Nevada's Mandatory Arbitration Threshold to $100,000

For years, the dividing line in Nevada's district courts was $50,000. A civil damages case worth less than that was routed automatically into the court-annexed nonbinding arbitration program instead of onto the regular trial calendar. Assembly Bill 3 of the 83rd (2025) Session moved that line to $100,000 per plaintiff.

The change is not cosmetic. It rewrites NRS 38.250, NRS 38.255 and NRS 38.258, and it applies to civil actions filed on or after January 1, 2026. Many ordinary Nevada disputes sit in the newly captured band between $50,000 and $100,000: rear-end collisions with soft-tissue treatment, unpaid invoices, construction punch-list fights, property damage claims, and small commercial disagreements. Those cases now begin somewhere different than they would have a year ago.

AB 3 also changed how arbitrators are paid, capped the attorney's fees an arbitrator or short trial judge may award, and pulled three new categories of cases out of the mandatory program entirely. Below is what actually changed, when, and what it means before you file. If you are weighing how to bring a claim, our litigation practice handles matters inside these programs in the Eighth Judicial District.

What Assembly Bill 3 Actually Changed

AB 3 was introduced by the Assembly Committee on Judiciary during the 83rd (2025) Session, which convened February 3, 2025 and adjourned sine die on June 3, 2025. It amends Chapter 38 of NRS, the chapter that governs Nevada's court-annexed alternative dispute resolution programs.

Four substantive changes came out of the bill:

• The threshold doubled. NRS 38.250 previously required every civil damages action filed in district court to go to nonbinding arbitration if the cause of action arose in Nevada and the amount in issue did not exceed $50,000 per plaintiff, exclusive of attorney's fees, interest and court costs. AB 3 replaced $50,000 with $100,000 throughout NRS 38.250 and NRS 38.255.
• Arbitrator pay was taken out of the statute. The old NRS 38.255(4)(a) fixed arbitrator compensation at $100 per hour up to a maximum of $1,000 per case unless the arbitration commissioner authorized more for good cause. AB 3 deleted that hard number and instead requires the Nevada Supreme Court's rules to set maximum limitations on compensation, which the arbitration judge or arbitration commissioner may waive for good cause.
• Attorney's fees are now expressly capped in the program. The rules must authorize an arbitrator to award a prevailing party attorney's fees not to exceed $15,000, as provided by specific statute or court rule, plus costs and interest.
• Short trials got the same fee ceiling. Section 3 amends NRS 38.258 so that if the Supreme Court authorizes short trials, the governing rules must authorize the short trial judge to award prevailing-party attorney's fees up to $15,000. AB 3 also moved the statutory definition of "short trial" into a standalone section of Chapter 38 so it applies across NRS 38.250 to 38.259.

When the New Threshold Takes Effect

Section 6 of AB 3 split the effective date. The bill became effective upon passage and approval for the limited purpose of adopting rules and performing preparatory administrative tasks. For every other purpose, it became effective January 1, 2026.

Section 5 is the provision most people need to read carefully: the amendatory provisions apply to civil actions filed on or after January 1, 2026. The trigger is the filing date, not the date of the crash, the breach, or the injury. A collision that happened in August 2025 but is filed in February 2026 is governed by the $100,000 threshold. A case filed in November 2025 stays under the old $50,000 rule for its life, even though it will be litigated well into 2026.

That single distinction can change which calendar a case sits on, who decides it first, and how long it takes to reach a resolution.

Who This Affects First

NRS 38.255(2) requires the district court of any judicial district whose population is 100,000 or more to establish three programs: mandatory arbitration under NRS 38.250, a voluntary arbitration program for cases above the threshold, and a voluntary binding arbitration program. In practice that captures Nevada's two largest trial courts, including the Eighth Judicial District Court serving Clark County. Rules may provide for similar programs in the other judicial districts.

The practical effect falls hardest on mid-sized claims. A driver with meaningful medical treatment but no surgery, a subcontractor chasing a five-figure balance, a landlord with storm damage, a small manufacturer in a supply dispute: cases in the $50,000 to $100,000 band that would previously have proceeded on the district court's ordinary track now start in the arbitration program.

There is a floor as well as a ceiling. NRS 38.255(3)(a) excludes from mandatory arbitration any action in which the amount in issue is more than $100,000, or less than the maximum jurisdictional amounts specified in NRS 4.370 and NRS 73.010, which are the justice court and small claims limits. Justice court jurisdiction in Nevada currently runs to $15,000. Truly small claims belong in justice court, not in the district court program.

Three New Categories Pulled Out of Mandatory Arbitration

NRS 38.255(3) has long listed case types excluded from the mandatory program, including class actions, actions in equity, actions concerning title to real estate, probate actions, appeals from courts of limited jurisdiction, declaratory relief actions, domestic relations matters, extraordinary writ proceedings, judicial review of administrative decisions, cases already committed to arbitration by pre-dispute written agreement, cases presenting unusual circumstances constituting good cause for removal, cases involving an incarcerated party, and cases sent to mediation under Supreme Court rules.

AB 3 added three more:

• Actions in which an insurer is alleged to have acted in bad faith regarding its obligations to provide insurance coverage and punitive damages are sought;
• Actions involving sexual assault or sexual battery; and
• Actions for product liability.

The common thread is complexity and stakes that do not fit a compressed, low-cost process. A product liability case can require accident reconstruction and design testimony that an abbreviated arbitration hearing was never built to absorb. The same is true of a catastrophic claim; our catastrophic injury practice handles matters whose damages exceed any arbitration threshold.

What to Do If Your Claim Sits Near the Line

A few practical points follow from the statutory language itself.

• Value the case before you file, not after. "Amount in issue" under NRS 38.250 is measured exclusive of attorney's fees, interest and court costs. Those items do not push a claim over the ceiling.
• Filing date is the switch. Whether a complaint was filed before or after January 1, 2026 determines which regime governs, so the filing date is the first thing to check on a case that straddles the change.
• Removal for good cause still exists. NRS 38.255(3)(l) excludes actions that present unusual circumstances constituting good cause for removal from the program. That path is unchanged by AB 3.
• Arbitration here is not the end of the road. The rules must include provisions for trial upon a party's exercise of the right to a trial anew after arbitration, alongside disincentives to appeal. Requesting a trial de novo carries consequences that should be weighed before the hearing, not after.
• Document damages early. Because these cases are decided on a compressed record, medical billing, repair estimates, wage records and contract documents need to be organized from the outset.

Why This Sits With Our Litigation Practice

Court-annexed arbitration is not a lesser forum, but it is a different one. Evidence comes in faster, discovery is limited, and the persuasive burden lands on preparation rather than on a long trial narrative. Trying a case well in that setting is a distinct skill from trying it well to a jury, and knowing when to leave the program is its own judgment call.

O'Reilly Law Group has practiced in Nevada courts since 1972. John F. O'Reilly, the firm's Chairman and CEO, is a past President of ABOTA Las Vegas. Senior Counsel Byrum C. Lee has more than 40 years of practice and over 100 trials. That trial orientation matters under AB 3 precisely because the new threshold pushes larger disputes into a compressed process where the option of a trial anew has to be preserved deliberately.

Cases in the newly captured band typically reach us through auto accident claims and through commercial disputes handled by our business litigation group. This page describes Nevada law in general terms as of its publication and is not legal advice about any particular claim. If you want to understand how AB 3 affects a specific dispute, call 702-382-2500 or visit our office at 325 South Maryland Parkway in Las Vegas.

Terms you may hear

Nonbinding arbitration

A hearing before a court-appointed arbitrator rather than a judge or jury. The award resolves the case only if no party timely exercises the right to a trial anew in district court.

Amount in issue

The damages figure that determines which track a case follows under NRS 38.250. It is measured per plaintiff and excludes attorney's fees, interest and court costs.

Trial de novo

A trial anew in district court after an arbitration award, obtained by a party exercising that right under the program rules. The rules also build in disincentives to appeal.

Short trial

A trial conducted with the consent of the parties under procedures designed to limit its length, including restricted discovery, a jury of not more than eight persons, and a set time limit per side. AB 3 moved this definition into its own section of Chapter 38 of NRS.