Shield Smash is a Defense Mastery skill unlocked at Tier 2, with 4 points spent into mastery bar. Its the first of three passive shield attacks to become available to the defender, with the other two being Disable and Pulverize. It requires an equipped shield to activate!
Like all passive shield attacks, Shield Smash is automatically used when attacking, with a chance of 6% at level 1/6 and 16% at skill level 6/6. Spending points into this skill does not lower the chances of the other two skills proc'ing.
Damage dealt is weapon damage + shield damage, both modified by applicable modifiers from equipment and skills (Storm Surge, Envenom Weapon, ...). It also reduces the Defensive Ability of the target by an absolute (not %) value. Shield attacks do carry over secondary effects like Slow from Nightshade and count as two attacks for charge up skills like Calculated Strike or Psionic Touch.
Strategy
The Defensive Ability reduction works best against tougher monsters which require multiple hits to kill, like heroes, champions and bosses. Often you will notice several critical hits (yellow numbers) following a successful Shield Smash.