Newly-filed Nevada civil litigation will ring in 2026 with major changes regarding nonbinding arbitration. On June 3, 2025, Governor Joe Lombardo signed Assembly Bill 3 into law to update the Court Annexed Arbitration Program (“Program”).[i]
The last amendment to the Program was in 2005. The Program was created “to provide a simplified procedure for obtaining a prompt and equitable resolution of certain civil matters.”[ii] It only applies to counties with populations over 100,000. Currently, this limits the Program to Clark and Washoe Counties, where Las Vegas and Reno, respectively, are located.
Most significantly, the jurisdictional limit will double from $50,000 to $100,000 — more than required for diversity of jurisdiction removal to federal court. This amendment is long overdue, given the overall increase in litigation costs, most notably for medical services and expert witness fees.
Once effective, 16 categories of actions will qualify for automatic exemption. The following types of actions were added to those automatically exempt from the arbitration program:
Insurance bad faith actions where punitive damages are sought;
Sexual assault or sexual battery actions; and
Product liability actions.[iii]
If a case does not fall into one of the 16 categories for automatic exemption, plaintiffs may request an exemption from The Program. The determination is made by the Alternative Dispute Resolution Commissioner.[iv]
Cases assigned to the Program are randomly assigned to a neutral third-party arbitrator, selected from an approved panel.[v] The arbitrator has authority “to relax all applicable rules of evidence and procedure to effectuate a speedy and economical resolution of the case without sacrificing a party’s right to a full and fair hearing on the merits.”[vi]
The other major change is in the amount of attorney’s fees recoverable by a prevailing party. Previously, a prevailing party could seek up to $3,000, subject to the discretion of the arbitrator. Now, the arbitrator must award the prevailing party an amount not to exceed $15,000.[vii]
Takeaways
These changes become effective for all civil cases filed on or after January 1, 2026.[viii] The new mandatory and increased attorney’s fees, along with the continued mandatory award of costs and interest to the prevailing party should make the Program more attractive to the plaintiff’s bar.
This amendment should lead to more case assignments to the Program, and relieve district courts of some of their backlog. This amendment will also benefit defendants. More cases should be resolved in a less costly and more expedited manner, and the potential for runaway verdicts will be reined in.
Sources
[i] A.B. 3, 83RD Leg. (Nev.2025).
[ii] NV ST ADR ARB Rule 2(a).
[iii] A.B. 3, 83RD Leg. (Nev.2025).
[iv] NR ST ADR ARB Rule 5.
[v] NV ST ADR ARB Rule 6(a).
[vi] NR ST ADR ARB Rule 8.
[vii] A.B. 3, 83RD Leg. (Nev.2025).
[viii] A.B. 3, 83RD Leg. (Nev.2025)
