This is a question asked simply to avoid employers hiring someone who might lose them money or jeopardize a reputation that's been hard-earned. Nevertheless, all doctors get sued sooner or later, and many of these legal actions never come to pass. The interviewer will not hold it against you for a lawsuit--he or she just doesn't want someone sued so frequently that it suggests that you're the problem and not overzealous attorneys. Most suits are filed for the purpose of beginning discovery to see if there really is merit to a case, and then the bogus claims go away or prescribe, and your prospective employer knows this; however, a settlement may seem just as bad as any lawsuit you lose, since most settlements are made to contain damage from a likely unfavorable outcome. Be straightforward, but make sure you give your side of the story--factually and unapologetically. Don't shift blame to anyone else, because that looks bad. Own it, and if you can explain how a lawsuit occurred from just a complication, this is something easily understood by any hospital administrator or large group administrator.