52.—(1) Where the Secretary of State is satisfied that—
(a)compensation has been or will be paid to or in respect of a person to or in respect of whom a pension or gratuity is being or may be paid; or
(b)that any compensation which has been or will be paid will benefit such a person
the Secretary of State may take the compensation into account against the pension or gratuity in such manner and to such extent as he thinks fit and may withhold or reduce the pension or gratuity accordingly.
(2) Where the Secretary of State considers that it is by reason of some act or omission by or on behalf of a person to or in respect of whom a pension or gratuity is being or may be paid that—
(a)there is no compensation to be taken into account against that pension or gratuity under paragraph (1); or
(b)the amount of compensation to be taken into account against that pension or gratuity is less than it would otherwise have been; and
(c)the Secretary of State is of the opinion that such act or omission was unreasonable
the Secretary of State may assess the amount of the compensation which, in his opinion, would have fallen to be taken into account but for such act or omission, and may, for the purpose of paragraph (1), treat that amount as if it were compensation which could be taken into account under that paragraph.
(3) In this article “compensation” means—
(a)any periodical or lump sum payment in respect of the disablement or death of any person, or in respect of any injury, disease or incapacity sustained or suffered by any person, being a payment—
(i)for which provision is made by or under any enactment, Order in Council (including this Order), Warrant, Order, scheme, ordinance, regulation or other instrument; or
(ii)which is recoverable as damages at common law; or
(b)any periodical or lump sum payment which, in the opinion of the Secretary of State, is recoverable or payable—
(i)under any enactment, scheme, ordinance, regulation or other instrument whatsoever promulgated or made in any place outside the United Kingdom, or
(ii)under the law of any such place
and is analogous to any payment falling within subparagraph (a) of this paragraph; or
(c)any periodical or lump sum payment made in settlement or composition of, or to avoid the making of, any claim to any payment falling within subparagraph (a) or (b) of this paragraph, whether liability on any such claim is or is not admitted.