The start of a new year often brings new laws, and for anyone involved in civil litigation in Nevada, January 1, 2026, marks a significant shift. The passage of Assembly Bill 3 (AB3) has transformed the state’s Alternative Dispute Resolution (ADR) programs. The bill changes how civil cases will be handled in court. Whether you are a business owner, an individual considering a lawsuit, or someone currently involved in a dispute, understanding AB3 is critical. We’ll break down the main changes and, more importantly, why you cannot afford to navigate this new legal landscape without an experienced Nevada attorney.
AB3 changes Nevada’s Mandatory Arbitration and Short Trial programs. The bill proposed to update the program that hadn’t been substantially revised in nearly two decades . Due to rising litigation costs, the old $50,000 cap for mandatory arbitration was clogging up the district courts with cases. This also lengthened the amount of time it takes for cases to move through the Nevada court system. AB3 was passed to cure that issue, but the final version includes important amendments that go beyond the monetary cap change.
Main Changes Under Nevada’s Assembly Bill 3
1. Monetary Cap Raised to $100,000.
This means that most civil cases where the amount in question is $100,000 or less will now be diverted from the district court and into the arbitration program. This affects a broad range of disputes, including breach of contract, property damage, and other commercial lawsuits.
2. Attorney’s Fees Cap Increased to $15,000.
Parties looking to implement any Alternative Dispute Resolution clauses in their contracts must take into account the increase in attorney fees. You can find out more information about Alternative Dispute Resolution clauses here.
3. New Automatic Exemptions from Arbitration.
Current cases that are automatically exempt from arbitration include:
- Class Actions.
- Probate Actions.
- Domestic Relations.
- Real Estate Title Actions.
- Declaratory Relief actions.
- Medical/Dental Malpractice.
- Equitable/Extraordinary Relief actions.
- Business Court Actions.
- Construction Defect Actions.
- Incarcerated Party Actions.
- Alternative Dispute Resolution (ADR): Cases already submitted to ADR by written agreement.
AB3 adds new categories of cases that are automatically exempt from arbitration. These include:
- Insurance Bad Faith Actions.
- Sexual Assault/Battery.
- Product Liability Actions.
Navigating the New Rules with a Nevada Attorney
An attorney will help you identify the strategic pros and cons of each path based on the unique facts of your case. As a plaintiff, just because your case could fall under the new arbitration rules doesn’t mean it has to. Your attorney will know how to properly plead and argue for an automatic exemption from arbitration. Conversely, if your company is a defendant in a case which could lead to significant exposure, your attorney can fight to keep it in arbitration.
An experienced attorney will also be able to accurately assess your potential exposure or recovery regarding attorney’s fees, which is now five times higher than it was just last year . This will directly impact settlement negotiations and the decision to request a trial de novo (a new trial in district court) if you are not satisfied with the arbitration award.
The new rule has created potential inconsistencies and lawful questions that only an experienced practitioner will recognize. It is recommended to contact local attorneys, such as a Las Vegas business attorney or business counsel in Reno, as they will be more familiar with how local courts are addressing these new changes. While AB3 aims to streamline justice and alleviate court congestion, it may also produce a more complex and strategic environment for business disputes.
