Old man, arrested, lost nerve (8)
I believe the answer is:
panicked
'lost nerve' is the definition.
(I've seen this before)
'old man arrested' is the wordplay.
'old man' becomes 'pa' (both can mean father).
'arrested' becomes 'nicked' (I've seen this before).
'pa'+'nicked'='PANICKED'
(Other definitions for panicked that I've seen before include "Unnnerved" , "Became frantic with fear" , "lost nerve" , "Scared" .)