Do you have any lawsuits currently or in the past, including any settlements?

This is a straightforward question. No one wants someone certain to lose them money or jeopardize their reputation. However, it is a truism that all physicians are at risk for malpractice suits, whether these actually come to pass or not. The interviewer will not dismiss you for lawsuits--he or she just doesn't want someone who is sued so frequently, as to suggest there's a problem. That being said, not all suits come to pass, and a lawsuit filed is not a deal breaker; many are just filed against you for the purpose of initiating and accomplishing discovery to see if there really is merit to a case. If there aren't really any substantial missteps on your part, these go away or prescribe, and your interviewer will know this. A settlement, on the other hand, can be just as bad as a lawsuit you lose, because most settlements are made to mitigate the damage of a likely unfavorable outcome.
If there are suits, losses, or settlements, be truthful, but half of the truth is your side of the story, so make sure you give it. Do not blame your previous institution or group--that just looks bad for you. Take ownership, but if you can explain why a lawsuit occurred due to a complication and not overt malpractice, this is something any hospital administrator will understand.