Nevada has been the leader in alternative dispute resolution for many years, and arbitration has been a highly effective means of resolving civil cases without having to go through long court trials. However, past arbitration limits in Nevada had been considered restrictive, particularly where high-value claims were concerned.
Assembly Bill 3 (AB3) was overwhelmingly approved by both the Assembly and Senate on June 3rd and signed into law during the 2025 legislative session. It increases the arbitration cap to over $100,000 in civil cases, making arbitration more accessible and applicable to a broader range of claims.
Important Changes to AB3
- Increased Limit of Arbitration – The most significant and first change that AB3 created is the increase in the limit of arbitration for civil cases. Under previous law, arbitration claims were limited to $50,000. The passage of AB3 doubles that to $100,000, allowing parties an increased incentive to choose arbitration as a means of resolving a dispute.
- Applicable Areas and Access – The new arbitration limit of $100,000 covers the majority of civil matters, including personal injury, property damage, breach of contract, and consumer protection cases. AB3 makes arbitration more accessible to Nevada citizens where the amount is over $50,000 but below the new $100,000 limit.
- Voluntary Arbitration – AB3 makes clear that arbitration is voluntary for both parties. Arbitration is only mandatory if agreed to in the contract or by mutual consent after the dispute has arisen.
- Streamlined Process – With the higher arbitration threshold, the bill streamlines the arbitration process for these types of cases. This means shorter hearing times, simpler rules of procedure, and less formal discovery, which reduces the court and party workload.
Benefits of AB3
- Faster, Cheaper Resolution – Raising the arbitration threshold means more people and companies can resolve their disputes outside the clogged, expensive court system. Arbitration can be resolved in months, at lower legal costs, so it’s a good option for bigger cases.
- Relief to Jammed Courts – The higher the arbitration ceiling, the more cases will be resolved by arbitration instead of traditional lawsuits. This frees up Nevada courts, allowing judges to focus on complex cases while providing faster settlements on small claims.
- Consumer and Business Flexibility – Businesses and consumers benefit from the potential to resolve disputes in a less formalized and costly way. This produces more business deals and a safer and steadier environment for consumer protection claims.
- Long-Term Impact on Nevada’s Judicial System – More arbitration in this fashion constructs a more efficient judiciary in Nevada, encouraging the development of alternative solutions for conflict resolution and placing the state at the forefront of effective and affordable legal proceedings.
- Modernization and Inflation Adjustment – The prior cap of $50,000 hadn’t been updated in almost two decades. With rising costs in medical fees, litigation costs, and overall economic factors, this cap had become outdated. This led legislators to view the increase as a necessary modernization, not a radical overhaul.
- Additional Protections Addressing Opponent Concerns – While concerns like potential bias and cost to low-income parties were raised, the courts now have safeguards in place to address these concerns, including:
- Random or agreed arbitrator selection
- Restricted discovery and hearing time to reduce cost
- Possibility of short trial if either party rejects the arbitration outcome
These features make the system more transparent and fair than some private models of arbitration that have been criticized in consumer or employment disputes.
What’s Ahead: The Future of Arbitration in Nevada
As Nevada’s judiciary gets with the times, AB3 was a big step towards the dispute resolution system in the state becoming more modern. Raising arbitration caps, AB3 opens up more ways to resolve civil disputes cheaper and faster. It also reflects the fine line between access to justice, fairness, and transparency in the process.
AB3 reduces the workload for Nevada courts and brings arbitration to more people, but we’ll have to see how it plays out and how it impacts the court system and consumers. As it evolves, arbitration has to be fair, reasonable, and efficient for all parties.
As Nevada continues to be a leader in dispute resolution, parties and companies will be faced with keeping up with developments in arbitration statutes. If you’ve been involved in a car accident, having a knowledgeable Las Vegas car accident lawyer who understands the ins and outs of arbitration can help you successfully navigate these changes.
Endnotes:
Nevada Legislature. Assembly Bill 3 – 83rd Session (2025). Retrieved from: leg.state.nv.us
Nevada Supreme Court. “The State of Arbitration in Nevada.” Accessed 2024.
American Arbitration Association. “Arbitration as an Alternative to Litigation.” 2023.
Nevada Bar Association. “The Future of Alternative Dispute Resolution in Nevada.” 2023.
National Center for State Courts. “Case Management and Alternative Dispute Resolution.” 2023.