Defector's case dismissed — exercise privilege, ultimately (7)
I believe the answer is:
escapee
'defector's' is the definition.
'case dismissed exercise privilege ultimately' is the wordplay.
'dismissed' indicates anagramming the letters.
'exercise' becomes 'pe' (Physical Education).
'ultimately' says to take the final letters.
The last letter of 'privilege' is 'e'.
'case' anagrammed gives 'esca'.
'esca'+'pe'+'e'='ESCAPEE'
(Other definitions for escapee that I've seen before include "One flees captivity" , "One running from prison" , "One breaks out of prison" , "Fugitive from prison" , "Runaway" .)