Nevada made a major shift in how civil lawsuits are handled with the passage of Assembly Bill 3 (AB 3), which took effect on January 1, 2026. The most significant change is an increase in the state’s mandatory arbitration threshold from $50,000 to $100,000. As a result, many more personal injury and civil cases are now required to go through Nevada’s court-annexed arbitration system before ever reaching a traditional jury trial.

The purpose behind the law is to reduce the growing backlog in Nevada’s district courts and create a faster, more efficient path for resolving mid-level disputes. Under the new rules, any eligible civil case valued at $100,000 or less per plaintiff will generally be routed into mandatory, non-binding arbitration instead of proceeding directly through the normal litigation process.

While arbitration has existed in Nevada for years, AB 3 dramatically expands its reach. Cases that previously would have proceeded to full jury trials will now be handled through a more streamlined system with tighter timelines, limited discovery, and fewer litigation costs. This change will significantly impact how attorneys, insurance companies, and businesses evaluate cases, negotiate settlements, and manage litigation budgets.

The law does include important exceptions. Certain types of cases are automatically excluded from mandatory arbitration because lawmakers recognized they are too sensitive or complex for an expedited process. These exemptions include bad faith insurance lawsuits involving punitive damages, product liability claims, and civil actions involving sexual assault or sexual battery allegations.

AB 3 also changes litigation strategy in a major way. In the past, attorneys sometimes alleged damages exceeding the prior $50,000 threshold in order to avoid arbitration and gain leverage through the threat of a costly jury trial. With the new threshold sitting at $100,000, that tactic becomes far more difficult and much less practical. Many claims that previously stayed on the district court trial docket will now remain locked into arbitration.

Another important aspect of the new system is the balance between streamlined procedures and higher financial exposure. Arbitration rules still limit discovery, depositions, and expert disclosures, even though cases may now involve damages approaching six figures. That means both plaintiffs and defendants will need to prepare their cases far earlier and much more efficiently than before. Insurance carriers, defense attorneys, and plaintiffs’ firms will all need to rethink how they investigate and value cases under tighter deadlines.

Although Nevada’s arbitration system remains non-binding, either side can still request what is known as a “Trial De Novo,” essentially requesting a new trial in district court. However, doing so comes with significant financial risk. If a party rejects the arbitrator’s award and then fails to achieve a substantially better result at trial, Nevada law allows the court to impose significant penalties, including attorney’s fees and litigation costs. With arbitration awards now potentially reaching $100,000, the financial consequences of rejecting an award are much more significant than they were under the old system.

Overall, AB 3 represents a major restructuring of Nevada’s civil litigation process and reflects lawmakers’ efforts to encourage faster dispute resolution and reduce reliance on lengthy jury trials for mid-tier claims. For attorneys, insurers, and businesses that adapt quickly, the new system may create opportunities for more efficient and predictable outcomes. At the same time, for attorneys and litigants who rely on older litigation strategies, the risks and costs under the new framework could prove much higher.
 

Endnotes

Nevada Legislature. AB 3 (BDR 3-472). Revises provisions relating to alternative dispute resolution. Approved: June 3, 2025. Effective: January 1, 2026.

Policy Engage, Nevada AB3—Increases the monetary threshold for mandatory nonbinding arbitration in civil actions. (BDR 3-472).

Disclaimer: Because each case is different, parties involved in civil litigation in Nevada should contact an experienced attorney to better understand how AB 3 may affect their specific case, legal rights, and litigation strategy. The National Law Review does not answer legal questions, nor will we refer you to an attorney or other professional if you request such information from us. Please see NLR’s terms of use.