I would just say something like, "I heard about you, the University, and the lawsuit with that student, and it makes me anxious about my relationship with you."

It is likely that she might want more information about what exactly makes you anxious (since the lawsuit and what actually happened is out of your purview) so you may have to come up with a more exact, "if such a bad situation can happen in your relationship with that student, I don't see how our relationship is different, why something like that couldn't happen between us."