Nevada Assembly Bill 3 proposes raising arbitration cap to $100,000 for civil cases

On February 17, 2025, the Nevada Assembly Committee on Judiciary convened to discuss Assembly Bill 3 (AB 3), which proposes a significant increase in the monetary threshold for mandatory, nonbinding arbitration in civil actions. This bill aims to enhance access to justice by raising the cap from $50,000 to $100,000, a change that advocates argue is long overdue given the inflationary pressures over the past two decades.

The meeting featured presentations from Erin Truman and Adam Gans, alternative dispute resolution commissioners from the Eighth Judicial District Court. They emphasized that the current cap has not been adjusted since 2005, despite a cumulative inflation rate of nearly 61% and a staggering 92% increase in medical expenses during that time. The commissioners noted that the existing cap has led to a decline in the number of cases entering the arbitration program, which has historically helped alleviate the burden on district court judges by resolving disputes more efficiently and cost-effectively.

Truman explained that the arbitration process is designed to be less formal and quicker than traditional jury trials, often resolving cases within six months compared to the two to three years typically required for a full trial. The program has successfully resolved approximately 120,000 cases since its inception in 1992, with a remarkable 93% resolution rate for cases that proceed to arbitration.

The discussion also touched on the implications of relaxed rules of evidence in arbitration, which aim to streamline the process and reduce costs for litigants. However, some assembly members expressed concerns about how these relaxed rules might affect the fairness of trials, particularly for lower-income individuals who may struggle to navigate the legal system without adequate representation.

In response to questions about the potential need for additional arbitration commissioners if the bill passes, the presenters assured the committee that the current staffing levels would suffice to handle an increased caseload. They also highlighted that the bill would not impose additional financial burdens on the state or county, as the costs associated with arbitration are primarily borne by the litigants themselves.

The committee members showed a keen interest in the bill's potential to improve access to justice, particularly for those with lower-value claims that might otherwise be excluded from the judicial process. Some members suggested considering an automatic adjustment mechanism for the cap to prevent future stagnation.

As the meeting concluded, the committee expressed a commitment to further explore the bill and its implications, indicating a recognition of the need for reforms that enhance the efficiency and accessibility of the judicial system in Nevada. The anticipated next steps include continued discussions with stakeholders to refine the legislation and address any outstanding concerns.