His finances are his finances. Her finances are her finances. She cannot be liable in any way. Ergo her paychecks are none of anyone’s beeswax!

And that goes triple for you.

You speak of "the lawyers" as if all lawyers were exactly the same, what, because they all wear suits? Well, your bodyguard and your assassin both have guns, but only one of them is your friend.

Her lawyer is her friend. His lawyer is NOT. He thinks it would be wonderful for his client if your daughter gets sucked into this. Her boyfriend may not agree with his own lawyer’s idea, but it’s real common for lawyers to do what they think is best, and just push their client to agree after the fact.

Refuse the request for personal financial information. He can’t have it. He can try to subpoena it, but he’ll be hoping he can intimidate you into handing it over. Don’t. Get her a lawyer to quash (kill) the subpoena. Then his lawyer will have to explain why he wants it. I can’t imagine why.

But once you know why, you can deal with it. Is he arguing you are supporting him by giving him a bed to sleep in? It’s your house – kick him out! Is he claiming a long relationship counts somehow? She can "break up" with him! Check – checkmate! His lawyer does not want a situation where he makes his client homeless, so he may start getting real reasonable with that threat over his head.

You and your daughter can and should protect yourselves.
References :

Do them both a favor and kick them out of your house before you wind up involved as well. You grew up once, may as well let them try to do so on their own.
References :

I think she has a legal right to refuse paying it.
References :

If the AMA was better at policing their own members, there would be less of a need for medical malpractice. When a Doctor can lose his license in one state, and then move 1 state over and hang his shingle, why should we let them off the hook? There needs to be a national standard and licensing so that if a doctor is grossly incompetent, they cannot go to another state and ruin another persons life.

If the doctors would come up with a protocol to follow for specific situations, then they could point at that protocol and say "I did what was called for". The problem is that the doctors don’t want their "hands tied". If the doctor’s communicated with their patients – rather than treat them like cattle – there would be fewer malpractice suits.

—— from the source listed below —————

National Medical Malpractice Statistics

1. Fewer than one-half of 1% of the nation’s doctors face any serious state sanctions each year. 2,696 total serious disciplinary actions a year, the number state medical boards took in 1999, is a pittance compared to the volume of injury and death of patients caused by negligence of doctors. A recent study by the Institute of Medicine of the National Academy of Sciences estimated that as many as 98,000 patients may be killed each year in hospitals alone as a result of medical errors.Earlier studies also found that this was a serious national problem.

2. Harvard researchers found that 1% of a representative sample of patients treated in New York state hospitals in 1984 were injured, and one-quarter of those died, because of medical negligence.Nationwide, that would have translated into 234,000 injuries and 80,000 deaths in 1988 from negligence in American hospitals. Most of this involves physicians. There is no clear evidence that there has been significant improvement since then.

3. A similar study conducted in California in 1974 found that 0.8% of hospital patients had either been injured by negligence in the hospital or had been hospitalized because of negligent care. Extrapolation of those findings would have yielded an estimate of 249,000 injuries and deaths from negligent medical practice in 1988.

. . .

14. There is no growth in the number of new medical malpractice claims. According to the National Association of Insurance Commissioners, the number of new medical malpractice claims declined by about four percent between 1995 and 2000. There were 90,212 claims filed in 1995; 84,741 in 1996; 85,613 in 1997; 86,211 in 1998; 89,311 in 1999; and 86,480 in 2000.
While medical costs have increased by 113 percent since 1987, the amount spent on medical malpractice insurance has increased by just 52 percent over that time.
Insurance companies are raising rates because of poor returns on their investments, not because of increased litigation or jury awards, according to J. Robert Hunter, director of insurance for the Consumer Federation of America. Recent premiums were artificially low.
Malpractice insurance costs amount to only 3.2 percent of the average physician’s revenues.
Few medical errors ever result in legal claims. Only one malpractice claim is made for every 7.6 hospital injuries, according to a Harvard study. Further, plaintiffs drop 10 times more claims than they pursue, according to Physician Insurer Association of America data.
References :
http://www.medicalmalpractice.com/National-Medical-Malpractice-Facts.cfm