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Nevada currently operates an expedited litigation program designed to resolve civil disputes with a value up to $50,000 without incurring the "usual" expense of litigating these disputes. Over time, however, the number of civil cases that have been "exempted" from this program based on the claimed damages exceeding $50,000 has grown dramatically. In response, the Nevada Legislature recently enacted a number of rule changes designed to streamline Nevada's arbitration process and include more cases. Among these changes are increasing the arbitration "cap" from $50,000 to $100,000.
By way of background, the Nevada's Court Annexed Arbitration program is a mandatory, non-binding program for civil cases in judicial districts that have county populations of 100,000 or more1. Nevada's Court Annexed Arbitration was born out of NRS 38.250, which was enacted in 1991 and went into effect in the summer of 1992. The newly enacted NRS 38.250 was regarded as a way to address the problem of increased court caseloads while promoting judicial economy and efficiency in civil cases having a probable jury award of less than $25,0002. Initially, cases that were automatically exempt from the program included class actions, medical malpractice disputes, divorce proceedings, and other domestic relations matters3.
A number of other states also utilized Court Annexed Arbitration at the time Nevada first enacted NRS 38.250. However, $50,000 was the more commonly used jurisdictional "cap" for such programs4. Nevada amended NRS 38.250 a few years later in 1996 to increase the jurisdictional cap from $25,000 to $40,0005, and again in 2005 to increase the cap to $50,0006.
The law remained unchanged until 2025, when the 83rd Session of the Nevada Legislature overhauled NRS 38.250 through the passage of AB37. Among other things, this overhauled statute increases the $50,000 cap, expands the list of case types that must be exempted from Arbitration, and increases the limit previously placed on the amount of attorney's fees that could be recovered in Arbitration8.
One of the most significant amendments to NRS 38.250 is the provision increasing the award cap from $50,000 to $100,000. This seemingly simple change recognizes the ever-increasing costs of litigation over the past 20 years. The result of this change will undoubtedly result in an increase in cases assigned to the Court Annexed Arbitration, and the reduction in cases the already overwhelmed Nevada District Courts must adjudicate. The goal of this overhauled statute is the same as it was in 1991, which is to promote judicial economy and efficiency in relatively small civil disputes. However, the program's goals may not be fully achieved in light of the increased attorney's fees that can be recovered following an arbitration award's appeal.
AB3 dramatically increased the amount of attorneys' fees an arbitrator may award the prevailing party following arbitration. Previously, these fees were capped at $3,0009. AB3 increased this amount to $15,00010. The Nevada Arbitration Rules currently hold that in cases where the arbitration award exceeds $20,000, the party requesting a trial de novo (i.e. appeal) must exceed or reduce the arbitration award by 10 percent, depending on whether they are the plaintiff or defendant, in order to receive any fee award11. If the arbitration award is less than $20,000, the requesting party must exceed or reduce the award by 20 percent12. For example, if a plaintiff is awarded $30,000 at arbitration and then rejects the award and requests a trial de novo, the plaintiff must obtain an award of at least $33,000 in the trial de novo in order to be entitled to any attorneys' fees. Whether the Supreme Court will amend NAR 20 based on the newly enacted AB3 remains to be seen13. Regardless, attorney's fees can still be awarded pursuant to NRCP 18.010, NRCP 68 and any other applicable fee recovery rule or statute.
AB3 also adds the following to the type of cases that must be exempted from program:
(o) Actions in which an insurer is alleged to have acted in bad faith regarding its obligations to provide insurance coverage and punitive damages are sought;
(p) Actions involving sexual assault or sexual battery; and
(q) Actions for product liability [14].
The newly enacted AB3 overhauls NRS 38.250 in seemingly small, but significant ways. The overhauled statute increases the cap from $50,000 to $100,000, quintuples (5x) the limit on recoverable attorney's fees, and expands the list of excluded cases. Like any overhauled statute, only time will tell if the legislature's changes achieve their intended goals, but more minor transportation incidents in Nevada are likely to be funneled to the arbitration system than ever before.
Footnotes
1 See, NAR 1.
2 Sophia I. Gatowski et al., Court-Annexed Arbitration in Clark County, Nevada: An Evaluation of Its Impact on the Pace, Cost, and Quality of Civil Justice, 18 Just. Sys. J. 3, p.287 (1996)
3 Id. at 289.
4 Id. at 287-88.
5 Id. at 288.
6 A.B. 468, 73d Leg., Reg. Sess. (Nev. 2005).
7 2025 Nev. Stat. 215 (A.B. 3).
8 Id.
9 NRS 38.250.
10 2025 Nev. Stat. 215 (A.B. 3).
11 NAR 20(b)(2).
12 Id.
13 The judiciary is entrusted with rule-making and other incidental powers reasonable and necessary to carry out the duties required for the administration of justice and to economically and fairly manage litigation... so long as the court-created procedural rule does not conflict with the state constitution, or abridge, enlarge or modify any substantive right. Berkson v. LePome, 126 Nev. 492, 500, 245 P.3d 560, 565 (2010) (internal citations omitted); NRS 2.120.
14 2025 Nev. Stat. 215 (A.B. 3).
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