Separate the chicken legs into thighs and drumsticks, then dust with the smoked paprika and half of the salt and set aside.
Remove the stems and seeds from the red and green pepper and cut them into strips around 5mm (~¼") thick.
Cut the shallots in half, then peel them and cut into half-moon shapes as thinly as you can (around 1mm).
Peel the garlic cloves and slice them as thinly as you can.
Cut the tinned tomatoes into 3-4 pieces.
Heat a medium (20cm or 8") saucepan over a medium heat and add the olive oil; do not heat too much or the paprika will burn. Cook the chicken pieces until they are nicely coloured on all sides, then transfer them to a plate and set aside.
Add the sliced shallots and peppers to the pan and cook for 5-7 minutes.
Throw in the garlic and cook for a further minute.
Turn the heat up to high, and when the ingredients are sizzling, pour in the sherry and reduce it by half.
Add the tomatoes, thyme, bay leaf, chilli flakes, sugar and the rest of the salt, then reduce the heat to medium, stir and cook for 5 minutes covered with a lid.
Add the chicken and any resting juices, making sure that it is coated in the sauce, return the lid and cook for 15-20 minutes. You want the chicken to reach an internal temperature approaching at 70°C or 158°F.
Whilst the chicken is cooking, tear or cut the ham into thin strips.
Remove the lid and stir in most of the ham (keep a little back for garnish), then cook uncovered for a final 5 minutes and serve.