Spotted insulted Liberal leaving (7)
I believe the answer is:
sighted
'spotted' is the definition.
(I've seen this before)
'insulted liberal leaving' is the wordplay.
'insulted' becomes 'slighted' (I've seen this before).
'liberal' becomes 'l' (abbreviation).
'leaving' indicates named letters should be taken away.
'slighted' with 'l' taken out is 'SIGHTED'.
(Other definitions for sighted that I've seen before include "Saw, observed" , "Seen" , "able to observe" , "Noticed" , "Picked out" .)